Trump Says 'We're Screwed' if Supreme Court Revokes New Tariffs – Markets Could Lose Billions Overnight

The statement was clear and direct, with no attempt to soften or minimise its tone. US President Donald Trump highlighted the potential consequences of a Supreme Court ruling that could revoke his authority to impose tariffs, suggesting it might have serious repercussions for the US economy. His comments seemed carefully timed, aimed at drawing attention to the issue without embellishment.

Markets are already showing signs of concern. Inflation remains persistent, and global trade continues to face uncertainty. Now, a single court decision could potentially reverse years of tariff policy in one stroke. For investors, this is a genuine risk, separate from the broader political debate.

A Historic Test of Presidential Power

At the centre of this legal storm is the Supreme Court. The justices are currently examining whether President Trump exceeded his authority when he relied on a 1977 national emergency statute to impose tariffs.

The 1977 National Emergency Act was never intended to be used for long-term trade policy. Yet, it has become the legal foundation for the most extensive trade tariff system in US history.

In November, the Supreme Court heard arguments about whether the President's use of the emergency statute to impose tariffs was legitimate. The justices, a mix of conservatives and liberals, questioned the arguments presented. Many expressed doubts about whether Trump's reliance on the emergency law was lawful.

Last week, the Court missed its initial opportunity to rule. The next decision is scheduled for Wednesday, and the timing is critical — brokerages and markets worldwide are eagerly awaiting the ruling.

Why Companies Are Watching Every Word

Big corporations are no longer staying silent. Retail giant Costco is suing the US government to recover import duties paid under tariffs that may now be declared unlawful. That case could set a precedent for countless others.

All eyes are on this case because if the tariffs are deemed illegal and reversed, companies that have paid these duties could launch mass lawsuits seeking refunds, potentially amounting to tens of billions of dollars.

This is crucial for the markets because a Court decision could force the US Treasury to refund all collected import duties from previous years.

The Refund Nightmare

Trump's recent comments on tariffs included warnings about the chaos that could ensue if refunds are required. He argued that such refunds could be impossible due to the vast sums involved and the complex paperwork that would be necessary.

Questions surrounding who should be paid back, when, and how much, remain unresolved and would be a logistical nightmare to implement.

US Treasury Secretary Scott Bessent has attempted to soothe investor fears, stating that the Treasury holds adequate cash reserves to cover any potential refunds. However, the reassurance may be short-lived.

Markets Fear a Violent Reaction

The anxiety is palpable. Should tariffs suddenly disappear tomorrow, supply chain logistics would shift within days. Import costs would drop, but pricing models would collapse, causing forecasts to become meaningless.

Shares in retailers, manufacturers, and freight companies could see extreme fluctuations — some soaring, others plunging.

Bond and currency markets will also feel the tremors, as the repercussions would ripple across all financial sectors.

Based on current trends, analysts predict that the volatility experienced during such a period could be unprecedented. A single court ruling might wipe billions from the value of US stocks and bonds within hours, creating chaos across global markets.