November 12, 2025: Tariff Turbulence Ahead

Although the Supreme Court is often unpredictable, last week’s arguments signaled broad skepticism toward the Trump Administration’s reliance on the International Emergency Economic Powers Act (IEEPA) as the legal basis for imposing the broadest and highest tariffs in nearly a century. Court watchers expect a ruling against the Administration in December. Importantly, the case concerns the so-called reciprocal tariffs announced on Liberation Day and revised several times since; it does not address sector-specific tariffs imposed under other statutes.

Even if the Court rules that IEEPA cannot serve as the basis for these tariffs, higher tariffs are unlikely to disappear. The Administration would almost certainly pivot to Section 301 of the Trade Act of 1974, which authorizes tariffs against trading partners engaged in unfair practices. However, Section 301 requires formal investigations and public input—a process that could take months. As a stopgap, the Administration may invoke Section 122, permitting temporary broad-based tariffs of 10–15% until 301 investigations conclude.

While the Supreme Court may require the Administration to change its course, the destination appears the same: an effective tariff rate of about 15%, a rate not seen since 1938. Meanwhile, expect businesses to shift their strategies as the path toward higher tariffs shifts. Those able to front-load their imports during the months ahead will likely do so, adding a short-term boost to economic growth.

Weekly Market Update: November 12, 2025