If tariffs are reduced following a court ruling, companies will experience immediate cost relief. However, these savings are passed to consumers slowly, over two to three quarters. This delay creates a temporary tailwind for corporate profit margins before prices on the shelf fall.
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.
A potential Supreme Court ruling curbing the President's AIPAA tariff authority will not impact all consumer goods equally. The effects are highly concentrated in specific categories where these tariffs dominate, such as toys (over 90% AIPAA-related), furniture (over 70%), and apparel (about 60%).