Year-end Black Swan: "Reciprocal Tariffs" Rejected, Will Trump's Plan B Trigger New Market Turmoil?

```

The U.S. Supreme Court's ruling on presidential tariff powers may become a major variable in the markets by the end of the year.

According to media reports, on Wednesday local time, Supreme Court justices expressed skepticism in oral arguments about Trump's authority to impose tariffs under the 1977 International Emergency Economic Powers Act (IEEPA), because the Act does not mention tariffs, containing only clauses on regulating imports during a national emergency declared by the U.S. President.

However, the real challenge facing the market is that even if the case is lost, the Trump administration still holds a variety of alternative legal tools to reimpose tariffs. Goldman Sachs expects the court to issue its ruling in December 2025 or January 2026. By the time of the decision, the total amount of imposed tariffs is expected to reach $115 to $145 billion, and the complex refund procedures may last for months, meaning the economic impact of the tariffs will persist.

This means that regardless of how the court rules, tariff uncertainty is far from over, and the market may face a new round of volatility.

Clear Divisions Within the Court, Outcome Remains Uncertain

The oral arguments on November 5th revealed subtle dynamics within the Supreme Court. According to a previous article by Wallstreetcn cited by Goldman Sachs, currently four justices may oppose the government’s position, three have shown support, and two lean toward the opposition but may still side either way.

The real-time reaction of prediction markets confirmed the uncertainty of the ruling. During the hearing, the market’s perceived probability of the tariffs being upheld dropped from 40% to 20%, eventually stabilizing around 30%.

If a partial upholding occurs, Goldman Sachs expects retaliatory tariffs are easier to overturn, with such tariffs contributing 6.2 percentage points to the effective tariff rate. Currently, IEEPA tariffs have raised the effective rate by about 7.6 percentage points in total.

Lengthy Refund Process, Prolonged Economic Impact

Even if the court overturns the tariffs, the market should not expect an immediate policy reversal. Goldman Sachs notes that refunds will not take place automatically, may take several months or longer, and depend on follow-up legal action by importers.

As of September, the government has collected about $89 billion in IEEPA tariffs. By the time of the Supreme Court ruling, this figure is expected to rise to $115–$145 billion. The massive refund amount and complex legal procedures mean the tariffs’ impact on the economy will persist for a considerable time.

It is worth noting that economic expert Rosenberg and "new Bond King" Gundlach stated in a dialogue that the removal of tariffs could trigger even greater chaos. On one hand, Trump may raise tariffs through other channels, significantly increasing policy uncertainty; on the other, the huge amount of refund would expand the U.S. fiscal deficit.

Multiple Alternative Plans in Trump Administration's Hands

More critically, losing the case does not mean an end to tariff policy. Goldman Sachs' analysis shows the Trump administration holds a variety of alternative legal tools.

If IEEPA authorization is denied, the government can rely on Section 122 and 301 of the 1974 Trade Act, Section 232 of the 1962 Trade Expansion Act, and Section 338 of the 1930 Trade Act, among others. These laws authorize the president to impose tariffs in response to unfair trade practices or balance of payments deficits in specific situations.

Goldman Sachs believes that the government could quickly reimpose similar tariffs under other statutes, especially against major trading partners. The final result may be a slight reduction in tariffs for a few minor trading partners, but little net impact on major trading partners, with the actual tariff rate potentially dropping by only about 1 percentage point.

Risk Warning and DisclaimerThe market involves risk, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at your own risk. ```