Supreme Court Tests Trump Tariffs

Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy, discusses the U.S. Supreme Court's hearing on the legality of tariffs implemented by the Trump administration. He explains that while a ruling against the administration could potentially undo a significant portion of the tariff increases, the situation is complex. Zezas notes that experts are divided on how the court will rule, despite its conservative makeup, due to questions about the executive branch's use of the International Emergency Economic Powers Act (IEPA) for tariffs against allies. He also suggests that even if the ruling goes against the administration, current tariff levels might not change significantly because other executive tariff powers, such as Section 301, could be deployed. While there's a possibility of lower effective tariff rates if the administration shifts to product-specific tariffs, the most likely outcome is a return to current tariff levels, making other debates like corporate responses to tariffs more critical for the economic outlook.