The U.S. Supreme Court's decision to strike down Trump's use of emergency powers for imposing wide‑ranging tariffs has prompted swift analysis from major Wall Street brokerage houses, with both Wells Fargo and BofA Securities offering early reads on what the ruling means for trade, markets, and the economic outlook.
Wells Fargo described the initial impact of the ruling as a “net positive,” noting that any future tariff actions are now likely to unfold over longer, more predictable timelines rather than through abrupt executive‑driven moves. The bank highlighted that more than $134 billion in tariffs collected under the International Emergency Economic Powers Act (IEEPA) through December may now become subject to refund claims. However, it cautioned that the timing of potential refunds remains unclear, leaving companies in a holding pattern as they await procedural guidance.
According to Wells Fargo, the ruling may also help reduce volatility in the tariff environment going forward, as broad emergency‑based actions have now been curtailed. Still, the brokerage flagged China as a major unresolved variable, noting that tariff policy toward Beijing could re‑enter a period of uncertainty depending on what legal mechanisms the administration turns to next.
BofA Securities offered a similarly measured assessment but emphasized the ruling's immediate “downward shock” to overall U.S. tariff levels. The firm's base‑case expectation is that the overturned tariffs will be partially replaced rather than completely eliminated, leading to what it estimates could be roughly a 2.5% drop in effective U.S. tariff rates. BofA projects the ultimate tariff regime could settle closer to an effective rate of about 8%, depending on how replacements are structured.
Crucially, the brokerage expects policymakers to shift from sweeping, across‑the‑board tariffs toward sector‑specific measures, introducing a new layer of uncertainty for industries that may be selectively targeted. While BofA views the ruling as a small positive for the U.S. economic outlook, it also characterized the decision as “hawkish for the doves”—a signal that fiscal pressures may intensify as the federal deficit trends back above 6% of GDP.
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