CNBC Television
Supreme Court to hear challenge to Trump administration's tariff policy
11/5/2025, 12:41:35 PM
Economic Summary
- The Supreme Court is hearing a high-stakes challenge to President Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs; a ruling could determine whether roughly $90 billion in tariff revenue must be returned, affecting federal receipts and trade policy.
- No president before Trump used the 1977 IEEPA to levy tariffs; businesses argue 'regulate' under IEEPA is not equivalent to taxing, raising constitutional questions about separation of powers and Congress's tax authority.
- Smaller import-dependent firms (two toy manufacturers, a New York wine importer, and a women's apparel company) brought the suits because big firms often lobby privately; tariffs are already compressing margins (CAVA's CEO said they absorbed some costs), and the court could issue a split ruling upholding narrow national-security tariffs (e.g., rare earths) while striking down others.
Bullish
- Court could uphold some national-security tariffs, preserving tariff revenue and authority.
- Large firms avoid public fights, reducing reputational risk and legal exposure.
Bearish
- Supreme Court could strike down many of the president's tariffs, forcing Treasury to return large sums.
- Tariffs are eating into company margins, hurting smaller firms that can't lobby or absorb costs.
- Legal limits on presidential authority could prevent rapid unilateral trade actions in future.
Bullish tickers
CAVA
Bearish tickers
COINCAVA
COIN
Bullish
High investor attention and trading activity could create trading opportunities despite volatility.
Bearish
Management comments on earnings calls can trigger volatility and regulatory/market scrutiny, making shares risky.
CAVA
Bullish
CEO indicated the company is absorbing some tariff costs, suggesting pricing power and operational resilience.
Bearish
Tariff costs are eating into margins, and prolonged trade measures could pressure profitability.
People mentioned
Donald TrumpEamon JaversCaroline LevittScott BessonMamdaniJoe