Former Fed Vice Chair Alan Blinder suggests businesses were hesitant to pass tariff-related costs to consumers because of constant policy changes. This uncertainty over the final tariff rate, while bad for investment, paradoxically suppressed the immediate inflationary impact many economists expected.

Given that trade policy can shift unpredictably, rushing to execute multi-year supply chain changes is a high-risk move. According to Flexport's CEO, staying calm and doing nothing can be a radical but wise action until the policy environment stabilizes and provides more clarity.

Even if the Supreme Court rules against the administration, it may not change U.S. tariff levels. The executive branch has alternative legal authorities, like Section 301, that it can use to maintain the same tariffs, making a court defeat less of a market-moving event than it appears.

Stocks most affected by tariffs showed a muted reaction to a pending Supreme Court decision. This suggests investors believe the executive branch could use other authorities to maintain tariffs and that any potential refunds from an overturn would take years to materialize, diminishing the news's immediate market impact.

Because U.S. tariff levels are likely to remain stable regardless of legal challenges, the more critical factor for the long-term outlook is how companies adapt. Investors should focus on corporate responses in capital spending and supply chain adjustments rather than the tariff levels themselves.

Unlike previous administrations that used trade policy for domestic economic goals, Trump's approach is distinguished by his willingness to wield tariffs as a broad geopolitical weapon against allies and adversaries alike, from Canada to India.

The market will likely ignore deteriorating fundamentals until a non-economic catalyst forces a repricing. A constitutional crisis, such as the Supreme Court striking down Trump's executive actions on tariffs, could be the event that shatters market sentiment and triggers a sharp correction.

The economic impact of tariffs is not an immediate, one-time price adjustment. Instead, Boston Fed President Collins characterizes it as a "long one-off" process where the full effect can take months or even a year to filter through the economy. This prolonged adjustment period extends uncertainty and complicates inflation forecasting.

The impending 107% tariff on Italian pasta is based on legally sound anti-dumping laws targeting a specific product. This is distinct from Trump's broader, country-specific tariffs, which were enacted via a national emergency declaration and are more likely to be struck down by the Supreme Court. This signals a key legal risk difference for global businesses.