Speaking to ET Now, Arnab Das, Global Economic Counselor & Macro Strategist at Invesco, described the ruling as a rebuke of the administration’s attempt to invoke international economic emergency powers to justify broad-based tariffs.
Supreme Court reins In executive authority
According to Das, the Court effectively ruled that declaring a sweeping national economic emergency to justify global tariffs “does not pass the smell test,” suggesting that the threshold for such extraordinary powers was not met.
The decision means the administration can no longer rely on executive fiat to impose tariffs under emergency provisions. Instead, it may need to pursue alternative trade mechanisms such as Section 232 (national security grounds) or Section 301 (unfair trade practices), both of which require formal investigations and procedural processes.
“This brings the US system of checks and balances back into play,” Das noted, referring to the constitutional balance between Congress, the judiciary, and the executive branch.
Market reaction: Relief, but not resolution
Equity markets responded positively to the ruling, with investors interpreting it as a signal that abrupt, large-scale trade shocks may become less likely. US bond yields also moved higher, reflecting expectations of potential fiscal implications if tariff revenue strategies are delayed or altered.
However, Das cautioned that while the ruling reduces the likelihood of sudden executive trade actions, it does not fundamentally alter the broader policy direction.“The objective of reorganising the US economy and the international trading system remains,” he said. “It may become more gradual and less aggressive, but the direction of travel is unlikely to change.”
Does this weaken US trade leverage?
A key question now is whether the ruling weakens Washington’s ability to use trade as a geopolitical tool, particularly against partners in Europe, the Middle East, Africa (EMEA), and emerging markets.
Das described the outcome as a “double-edged sword.” On one hand, it reinforces the perception that the US remains governed by institutions and rules rather than unilateral executive decisions. On the other, it does not eliminate the administration’s intent to rebalance trade and geopolitical burden-sharing.
“There should be no illusion globally that the push to reorganise trade and security burden-sharing will stop,” he said. “It may be less radical in execution, but uncertainty will remain.”
Can the ruling be challenged?
While review petitions or alternative legal strategies remain theoretically possible, Das suggested that overturning the Supreme Court’s decision directly would be difficult.
“The Court has ruled. It would be surprising if the administration could overturn this in a direct way,” he said, adding that policymakers may instead pivot to established trade statutes to achieve similar outcomes
Markets already under pressure
The ruling comes at a time when US markets are already grappling with weak GDP data and broader macroeconomic uncertainty. Investors are navigating multiple shocks, including slower growth signals and policy unpredictability.
Das argued that the US economy traditionally adjusts gradually, with policy shifts typically unfolding through institutional processes rather than abrupt shocks. The Court’s intervention may therefore help restore a more predictable policy environment, even if strategic trade tensions persist.
The bigger picture
For global investors, the ruling offers short-term relief but not long-term clarity. The recalibration of executive trade authority reinforces institutional credibility, yet the structural shift toward a more unilateral and protectionist US trade stance could continue through other legal pathways.
As markets digest both weak economic data and evolving trade policy, volatility is likely to persist — albeit within a more rule-bound framework.
Bottom line: The Supreme Court decision reduces the risk of sudden tariff shocks, supports market sentiment in the near term, but does not end the broader US push to reshape global trade dynamics.