Should the administration lose the Supreme Court case, it might shift to product-specific tariffs. This transition could introduce short-term market volatility, as the administration might initially propose high tariff levels as a negotiating tactic before settling on lower, more palatable rates.

A Supreme Court loss on using one specific law (IEPA) for tariffs would not end the administration's ability to wage a trade war. The executive branch has other laws it can use to impose levies, such as those allowing temporary or retaliatory tariffs, limiting but not eliminating its power.

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.

Donald Trump's tariffs on furniture, meant to boost US manufacturing, are increasing costs for domestic producers. Even companies manufacturing in North Carolina still import essential parts like wooden sofa legs and fabrics, making them collateral damage of the trade policy.

A pending Supreme Court hearing on the IEPA repeal could eliminate or adjust long-standing high tariffs on imported goods like cocoa, coffee, and palm oil. Such a ruling would offer significant cost relief to domestic food producers and could dramatically alter the pricing landscape for these commodities.

While the base case is that the President would replace tariffs struck down by the Supreme Court, there's a growing possibility he won't. The administration could use the ruling as a politically convenient way to reduce tariffs and address voter concerns about affordability without appearing to back down on trade policy.

Even if the Supreme Court rules against using emergency powers (IEPA) for tariffs, the President can use a patchwork of other legal authorities like Sections 122, 232, and 301. While this would curtail the ability to impose tariffs on a whim, it would still allow the administration to replicate the revenue effects.

Because tariff-driven inflation on everyday consumer goods has a greater financial impact on middle and lower-income households, any subsequent price relief from a change in tariff policy would provide a more significant economic benefit to these specific demographic groups.