The U.S. Supreme Court will hear oral arguments on the Trump tariff case on November 5, with the risk of trillion-dollar tax refunds potentially causing market turbulence

According to the Zhitong Finance APP, the U.S. Supreme Court announced on Thursday that it will hold oral arguments on November 5 regarding the legality of President Trump's global tariff plan implemented during his second term. This will be a significant test of the core claims of Trump's economic and trade policies. The focus of the case is whether Trump exceeded presidential authority and abused the emergency powers granted by the International Emergency Economic Powers Act (IEEPA).

Starting from February 2025, Trump declared a "national emergency" on the grounds of drug smuggling, illegal immigration, and trade deficits, and imposed a general tariff of at least 10% on imported goods from most countries, including China, Canada, and Mexico, along with higher "reciprocal tariffs."

U.S. Treasury Secretary Becerra stated that if the Supreme Court rules these tariffs illegal, the Treasury will have to refund about half of the collected tariff revenue, which would put significant pressure on federal finances. Becerra warned that if the final ruling is delayed until June 2026, it could involve refunds of $750 billion to $1 trillion, potentially leading to economic disorder.

Trump has taken a hard stance, stating that if the tariffs are abolished, the U.S. will face an "economic disaster." He has requested the Supreme Court to expedite the review, but legal experts point out that even the fastest ruling may take several months.

If the court ultimately overturns some tariffs, companies may be able to apply for refunds, which could provide short-term benefits to their financial conditions and stock prices. Rohit Tripathi, Vice President of Manufacturing Strategy at Relex, stated that corporate profits would improve immediately, but consumers are unlikely to feel significant price reductions in the short term, as most companies have previously absorbed or shifted the tariff costs through internal adjustments or supply chain changes.

Drew DeLong, head of the geopolitical department at consulting firm Kearney, pointed out that if Trump loses, companies will face a series of operational challenges, first needing to confirm refund eligibility, and secondly dealing with a potential "tariff vacuum period." Before new policies are introduced, companies may rush to restock, causing supply chain fluctuations and short-term price chaos.

Wall Street analysts expect that stocks of companies highly related to tariffs may rise due to market expectation corrections in the short term, but medium to long-term uncertainty remains high.

Experts indicate that even if the court overturns the tariffs, consumers will not immediately benefit during the upcoming holiday shopping season, as this year's imports and inventory purchases were completed months ago. Tripathi anticipates that it may take at least 6 to 8 months to see a gradual recovery in market inventory, and consumers will only gradually feel price reductions after a year.

Katie Thomas, head of the Consumer Research Institute at Kearney, emphasized that consumers will not receive refunds for tariffs that were previously passed on, but some companies may use refunds to reduce layoffs and lower retail prices to some extent. She pointed out that the key to truly benefiting consumers is to reduce economic and policy uncertainty, a goal that is difficult to achieve in the short term.

If the Supreme Court rules that Trump abused the IEEPA, the White House may quickly take alternative measures. DeLong analyzed that the most likely scenario is to use the emergency tariff powers granted by Section 122 of the Trade Act of 1974 to temporarily impose tariffs of no more than 15% on imported goods, but the maximum duration is only 150 days At that time, the government could initiate investigations against specific countries under Section 301, thereby implementing targeted tariffs, but this process is complex, time-consuming, and fraught with political uncertainty.

In addition, the Trump administration may also seek legislative support from Congress, but this route carries higher risks as tariff policies are not popular in Congress.

On August 1, Trump announced a high tariff of 39% on Swiss exports, effective August 8, citing a long-standing trade imbalance between the U.S. and Switzerland. The latest data shows that Swiss exports to the U.S. (excluding gold) plummeted by 22% in August compared to July, with watch exports declining by 8.6%, and gold exports crashing by 99%, down to only 0.3 tons. The trade deficit between the U.S. and Switzerland narrowed to 2.06 billion Swiss francs, the second-lowest level since 2020.

The Swiss government attempted at the last moment before the tariffs took effect to persuade Trump to abandon the increase, but was unsuccessful. Negotiations between the two sides are still ongoing, and U.S. Secretary of Commerce Gina Raimondo stated last week that "it is very likely that an agreement will be reached with Switzerland," but did not disclose specific details. To reduce dependence on exports to the U.S., Switzerland has signed a free trade agreement with South America