🥛 Will Trump tariffs be struck down? 🇺🇸

GM. This is Milk Road Macro, the macro newsletter that treats Supreme Court rulings like Fed meetings: potentially boring, potentially world-shaking.

Here’s what we got for you today:

✍️ Everything you need to know about the supreme court tariff situation
🎙️ The Milk Road Macro Show: The Dollar Milkshake Theory and The Investment of The Century w/ Brent Johnson
🍪 Alphabet CEO said no one is safe if the AI boom bursts

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EVERYTHING YOU NEED TO KNOW ABOUT THE SUPREME COURT TARIFF SITUATION

The Trump administration is tangled in a legal battle to keep tariffs in place.

And this is a very important situation to keep tabs on, as we look ahead to how asset markets might perform in the medium-term.

The Supreme Court is currently deliberating a case that could see a lot of the Trump tariffs axed.

This issue seems like something that is looming over markets but still feels like it’s some way off.

However, a decision could potentially come earlier than many people expect - and it might have a big impact on financial markets.

So, what’s the latest?

How likely is it that tariffs will be struck down?

When will we get a decision?

And how will asset markets react?

Let’s take a look…

So, what’s the latest?

The tariffs involved in the court case are those that were imposed under IEEPA (i.e. the President invoked a declared “national emergency” and then applied tariffs/duties under that statute).

These include so-called “reciprocal tariffs” (a baseline rate plus higher country-specific duties), plus other country-specific emergency tariffs under IEEPA (e.g., targeting imports from China, Canada, Mexico, India, Brazil for various non-traditional trade reasons).

If we look at revenue generated from tariffs in 2025 - the IEEPA tariffs affected by this court ruling amount to roughly 50% of total revenue generated so far.

The remaining roughly 50% of the tariffs are not part of this legal challenge because they were imposed under different statutory bases.

The Supreme Court heard oral arguments on November 5 (lawyers from both sides laid out their case and answered questions).

The court then “granted certiorari” and an “expedited schedule” - or in other words, the court agreed to hear the case and decided to speed up the process.

How likely is it that tariffs will be struck down?

General consensus among experts is that there is a reasonably high probability of the Supreme Court ruling against the IEEPA tariffs.

Certainly higher than 50% chance.

According to Polymarket, there is currently a 24% chance of the Supreme Court ruling in favor of the IEEPA tariffs ($1,200,000 volume on this particular market).

Source: Polymarket

This has fallen from more than 50% as recently as September.

If tariffs are struck down, it could turn into a very messy situation.

It would then be expected that the U.S. Government should “reimburse” all IEEPA tariffs paid so far.

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EVERYTHING YOU NEED TO KNOW ABOUT THE SUPREME COURT TARIFF SITUATION (P2)

When will we get a decision?

The Supreme Court moves at a very slow pace.

There is currently no fixed deadline for a final decision.

Although, it must come before the end of the court’s term (June 2026).

So, there’s not a lot of clarity here - it could be anywhere from “soon” to the middle of 2026.

It’s possible it could come before the end of this year, if Supreme Court Justices view the case as “urgent”.

But most experts seem to think that a decision will come in 2026, at some point before the end of June.

Based on all the predictions I’ve seen, it looks like the most likely timeframe for a decision is early next year (January-March) but it could slip into spring or early summer 2026.

How will asset markets react?

This is a tough question - because there are many different aspects to this.

There’s also the question of how much any potential decision is already “priced in”, considering it’s becoming clearer that there is a reasonably high probability of the Supreme Court striking down the tariffs.

However, in general, I think you’d probably expect to see risk assets, like stocks and bitcoin, reacting positively to a court ruling against the tariffs.

This is because markets might perceive this would lead to a better growth picture and increased global trade.

This may be more pronounced for equities in China and emerging markets, relative to U.S. stocks, because it would likely benefit these nations more than the U.S..

The more curious market would be the U.S. Treasury market (Government bonds).

I think the Treasury market (particularly longer-dated Treasuries) may react negatively to a court ruling against the tariffs (yields up).

This is because if the market perceives a better growth picture ahead, it may push yields higher.

A striking down of tariffs would also worsen the U.S. Government’s debt problems, with less revenue coming in from tariffs, which may help to push yields higher.

Yields moving up would be no good for the Trump team, because they have been focused on targeting lower yields to help to stimulate the economy and lower debt interest costs.

Commodities, particularly industrial metals like copper and aluminum, would also likely react positively, on the back of expected improved global trade flows and demand expectations.

Wrapping up

We’re sort of “in limbo” at the moment with this court ruling.

Nobody really knows when the decision will come.

It could come relatively soon, or it could be more than six months away.

However, it is becoming clearer that IEEPA tariffs are likely to be struck down.

This ruling could have a big impact on asset markets.

So this is definitely something to keep tabs on.

That’s it for this edition - catch you in the next one.

THE DOLLAR MILKSHAKE EXPLAINED 🥤

In today’s episode, we sat down with Brent Johnson (Santiago Capital) to talk about his “dollar milkshake” theory, stablecoins, credit risks, and the investment setup he’s watching into 2026.

Take a look at what surprised us:

How stablecoins are turbocharging dollar dominance and bypassing capital controls
Why Brent thinks the next big drawdown is closer than it looks, and what signals he’s watching
The case for U.S. asset outperformance, even in a volatile macro
A once-in-a-generation onshoring play tied to strategic supply chains and a 2026 U.S. initiative

Don’t sleep on this one 👇

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