The U.S. Supreme Court ruled last Friday (February 20) to remove a large number of tariffs imposed by President Trump on imported goods, as widely expected. However, the long-term impact remains more uncertain as the economy and markets readjust to the changing environment.

Trump and other White House officials have pledged to use other powers to implement these tariffs, and the president has announced a 10% tariff under part of the Trade Act of 1974.



But other questions remain: What will be the impact on prices? Will companies that have paid tariffs seek refunds? How will the Federal Reserve respond?

Here are five key points about the ruling and its consequences:

1. Economic impact

In summary, the macroeconomic impact is expected to be limited, especially before Trump's next move and the refund issue.

RSM's chief economist, Joseph Brusuelas, said the potential economic impact would be "narrow," but "there are huge potential winners," particularly in the tariff-sensitive retail and manufacturing sectors.

Economic growth slowed sharply in the fourth quarter, with GDP growth at an annualized rate of only 1.4%. However, this was mainly due to the government shutdown, and economic growth in the first quarter of 2026 may be faster.

"The fiscal situation has already indicated a fairly strong positive impetus for 2026, driven by the Beautiful Bill and loose monetary policy," said Jason Pride, head of investment strategy and research at Glenmede. "The tariff ruling could gradually amplify this stimulus, reinforcing above-trend economic growth expectations."

Pride warns that if businesses rush to import products ahead of Trump’s next tariff move, as they did in early 2025, it could temporarily drag down exports.

2. It helps with the inflation problem.

On the same day the court issued its ruling, the U.S. Commerce Department announced that, according to the Federal Reserve's main forecast indicator, core inflation was 3% annualized in December. Central bank officials estimated that the tariffs would have an impact of about 0.5 percentage points on inflation, and that this impact would be temporary.

Therefore, the loss of tariffs temporarily reduces a potential economic headwind, which could influence the Federal Reserve's interest rate decision this year.

Interestingly, according to CME Group data, the market slightly reversed its rate cut bets last Friday, now believing the next rate cut is more likely in July than the previously suggested June. Traders generally still expect two rate cuts this year.

"We believe that the decision by the Supreme Court to remove IEEPA tariffs will not have a significant macroeconomic impact on the U.S. economy or the Federal Reserve," analysts at Evercore ISI said in a report.

3. Alleviate market pressure

For much of the past year, Trump’s increasingly aggressive tariff pronouncements have periodically turbulent financial markets, only to rebound after he eventually abandoned many of his most radical measures.

Stocks rose as usual on Friday, masking concerns about economic growth and inflation and boosting hopes for corporate earnings. Treasury yields rose, but were contained as investors debated growth versus inflation.

"More broadly, this decision underscores the shift towards a slower, more procedurally constrained trade policy, reducing overall volatility but increasing the importance of fiscal mechanisms and supply considerations in the fixed income markets," said Dan Siluk, global head of short-term and liquidity and portfolio manager at Janus Henderson.

4. What if I want a refund?

Wall Street reacted differently to the prospect of tariff refunds.

Morgan Stanley estimates that the U.S. may repay approximately $85 billion to the affected parties. RSM's Brusuelas believes the figure is between $100 billion and $130 billion, while Raymond James analyst Ed Mills estimates it to be higher, around $175 billion, consistent with the University of Pennsylvania's model.

One problem is the process. The Supreme Court ruling didn't specifically address this issue, potentially leaving it to lower jurisdictions. Judge Brett Kavanaugh noted the potential for "confusion" in resolving this . Brian Gardner, Stifel's chief Washington policy strategist, speculated that refunds after passing through lower courts wouldn't be retroactive at all.

"We remain skeptical that the government will refund/pay a large sum of money, but the issue remains unresolved," Gardner stated in a report.

5. How do we view this now?

The road ahead will be complicated, but Trump said at a press conference last Friday that he was unwilling to compromise on tariffs , repeatedly calling them "the most beautiful word in the dictionary."

Importantly, tariffs have not disappeared.

Trump used the International Emergency Economic Powers Act to cover about 60% of the tariffs he has already implemented, and where they were never covered, the administration can invoke certain provisions of trade law to impose tariffs. However, he needs congressional approval for many of these measures, some of which have time limits.

Chris Krueger, managing director of TD Cowen Washington Research Group, wrote, “Given Trump’s public outrage over previous court rulings and criticisms of tariffs, we wouldn’t be surprised if the White House eventually makes a meaningful tariff escalation/response.” He anticipates that the 2026 tariff efforts will “go full steam ahead, with some temporary brakes…we’ll see.”