What does it mean if the U.S. Supreme Court's tariff ruling "misses the deadline" again today?

The U.S. Supreme Court has signaled that it may release an opinion around 10 a.m. Eastern Time on Wednesday (11 p.m. Beijing Time), reigniting market speculation about an imminent ruling on a key tariff decision.

The market had similar expectations last Friday, but according to CCTV News, on January 9 local time, the U.S. Supreme Court stated that it would not rule that day on the global reciprocal tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA).

The market's primary focus is on whether Chief Justice John Roberts and his colleagues will continue to delay the ruling on IEEPA tariffs, which could indicate a subtle shift in the court's stance.

Analysts point out that if the ruling is delayed until late February, the legal balance that initially seemed unfavorable to the Trump administration may tilt. Although institutions like Evercore ISI still maintain the basic judgment that Trump may lose, they also warn that with each week the ruling is delayed, the likelihood of a Trump victory increases.

This ruling has significant potential implications for the market. Some strategists worry that canceling the tariffs could create uncertainty that would weigh on the stock market, while others believe it would boost economic growth.

Additionally, if the court rules the tariffs illegal and orders refunds, it would impact the U.S. Treasury. Trump has warned on social media that this could involve "hundreds of billions of dollars" in compensation, describing it as "complete chaos."

Significance of the Delay Signal: The Balance May Be Tilting in Trump's Favor

Evercore ISI analyst Sarah Bianchi and others noted in their report that although the Supreme Court follows its own timetable, the court is well aware of the importance of this case, and they initially expected a decision to be made in the short term. However, if the Supreme Court fails to rule on the case before the end of February, it may be a good sign for Trump and tariff supporters

Once the ruling is delayed until late February or longer, the likelihood of the court ruling against the government will decrease, mainly considering the timeliness and financial impact of the issue.

JP Morgan analysts Amy Ho and Joyce Chang share a similar view. In their report, they stated that although legal experts generally expect the Supreme Court to rule that the president's use of emergency powers (IEEPA) to authorize tariffs is overreach, it is noteworthy that with each week the Supreme Court delays its decision, the chances of the Trump administration winning increase.

Additionally, JP Morgan analysts proposed another possibility: if the ruling is delayed until February, it may indicate that the Supreme Court views this case as a "high-profile case" on par with the Affordable Care Act. Ho and Chang pointed out:

Historically, the court tends to reserve its most impactful rulings for release at the end of the June term for extended deliberation. As evidence, two previous rulings regarding the Affordable Care Act were both issued in June.

It is worth noting that currently, market strategists have differing opinions on how the court ruling will affect the market.

Some forecasters believe that abolishing the IEEPA tariffs will mean more uncertainty, thus putting pressure on the stock market; while others believe that eliminating the import taxes will boost economic growth and the stock market.

In addition to the stock market, another key factor is the Supreme Court's attitude towards tariff refunds. If the court rules against Trump, whether to require the refund of tariffs already collected will become the focus.

Analysts point out that this is crucial for the bond market, as one reason why rating agency S&P maintains the U.S. sovereign debt rating and stable outlook is based on expected tariff revenue.

Trump Warns of Negative Consequences of Ruling

Currently, betting markets indicate that the probability of Trump winning is not high. Kalshi recently gave a winning probability of 32%, while Polymarket set it at 28%.

This decline in expectation mainly stems from the oral arguments on November 5, when some conservative justices' questions to Trump's lawyers were perceived as particularly skeptical.

Although Evercore currently still predicts that Trump is more likely to lose the case, they expect the government is prepared to replace most of the IEEPA-based tariffs with other authorizations.

For example, Trump has previously imposed import taxes on steel, aluminum, lumber, and other industries using different laws, and these industry-specific tariffs are not within the scope of this case.

Trump himself has issued a stern warning about the consequences of a potential loss. Opponents have long emphasized that the IEEPA legal text does not explicitly mention tariffs, and no president has ever used the statute to impose tariffs. In response, Trump argued, if the Supreme Court overturns these tariffs, the U.S. economy will suffer a severe blow.

He reiterated this position in a social media post on Monday and expressed concerns about potential tariff refunds. Trump stated:

"If for any reason the Supreme Court rules against the U.S. on tariffs, the actual amount we would need to repay would reach hundreds of billions of dollars." He also added that this figure does not yet include the "returns" required for countries and companies to invest in building factories and equipment to avoid tariffs. Trump concluded that this would lead to "complete chaos, making it nearly impossible for our country to pay off."