Traders Brace for Volatility: Supreme Court Set to Rule on Trump’s Tariff Powers This Friday

Global currency and equity markets are on high alert after the US Supreme Court announced it will potentially issue a ruling on the legality of the Trump administration's sweeping tariff measures this Friday, January 9. This decision represents a critical juncture for the “Liberation Day” tariffs—ranging from 10% to 50% on imports—which remain a cornerstone of the President's economic agenda.

High Stakes for the Dollar

The court's decision will likely serve as a binary trigger for the US Dollar. A ruling favoring the administration would cement the President's authority to levy duties under the International Emergency Economic Powers Act (IEEPA), likely bolstering the Greenback via safe-haven flows and inflation expectations. Conversely, a defeat would be viewed as a significant dismantling of Trump's economic leverage, potentially unwinding the “Trump Trade” premiums priced into the USD.

The administration has reportedly prepared contingency plans to reimpose levies even in the event of an unfavorable verdict, signaling that trade policy uncertainty will persist regardless of the judicial outcome.

Political and Economic Context

The legal battle follows rulings by the Federal Circuit and the Court of International Trade, both of which declared the tariff package unlawful. With the Supreme Court accelerating the docket, the Friday ruling could be the administration's defining legal test since returning to the White House.

President Trump has publicly pressured the court, stating to House Republicans on Tuesday: “I hope they do the right thing for the country... The President must be able to negotiate and maneuver on tariffs.”

However, during oral arguments in November, justices reportedly expressed skepticism regarding the executive branch's broad interpretation of emergency powers. A ruling against the White House would not only impact forex markets but could also reshape the political landscape ahead of the midterm elections.