No Change in Sight: Trump's Tariffs Likely to Hold Steady in the Short Term; Narrow Fluctuations in Plastics Today, EVA Up by 100

Despite the U.S. Court of Appeals overturning several of Trump's tariff policies, there is ample reason to indicate that...The import tariffs will not change significantly, at least not in the coming months.

Last Friday, the United States Court of Appeals for the Federal Circuit issued a ruling upholding the lower court's decision. The majority of the appellate judges believed that Trump's invocation of the International Emergency Economic Powers Act (IEEPA) of 1977 to justify multiple tariffs against specific countries exceeded his authority.

However, investors should not expect the U.S. court system to drive significant changes in Trump's tariff policies in the short term, for reasons includingThe slow proceedings of the Supreme Court, as well as other factors such as possible intervention by CongressHere are a few key points that the market should keep in mind as it prepares for subsequent developments:

The Supreme Court ruling may be issued in June next year.

The invalidated tariffs will remain in effect until October 14 to allow the Supreme Court to consider whether to hear the case.

According to Semafor, Finance Minister Vicente stated on Monday that he plans to draft a legal opinion to be submitted by the Attorney General of the Department of Justice to defend the legality of the tariffs in case the Supreme Court may make a ruling on this matter.

Owen Tedford, Senior Research Analyst at Beacon Policy Advisors, stated in a report,The Supreme Court is expected to hear the case early next year, and the verdict may not be announced until the end of June.

On Tuesday, Trump stated that his administration would request the Supreme Court to expedite the ruling on Wednesday, adding that he believed the stock market decline was influenced by the appeals court's tariff decision.

Terry Haines, founder of the prediction company Pangaea Policy, stated thatThe two most likely scenarios are: the Supreme Court upholds Trump's use of the IEEPA; or it gives Congress enough time to pass legislation granting the president the necessary authority—currently, the Republican Party, to which Trump belongs, holds a slim majority in both the House and the Senate.

However, other analysts are not optimistic about the Trump administration's prospects in the Supreme Court, even though the Supreme Court currently consists of six conservative justices and three liberal justices (with conservatives in the majority).

The analyst team led by Ed Mills at Raymond James stated: "We believe that the ruling is based on the Supreme Court's 'major questions' doctrine, determining that tariff authority 'belongs to Congress,' which poses a tough battle for the Trump administration in the Supreme Court." The so-called "major questions" doctrine refers to the requirement that when government agencies make decisions of significant national importance, they must obtain explicit authorization from Congress.

At the same time, many analysts, including the Raymond James team, emphasized thatThe Trump administration can achieve its desired tariff policy without relying on the IEEPA.

Mills and his colleagues wrote in the report: "Although the negative ruling by the Supreme Court is a blow to the Trump administration, we emphasize that the president still has several other channels of tariff authorization. This supports our view: the process may change, but the outcome is unlikely to be significantly different."

Other Tariff Authorization Options for Trump

What other options does Trump have besides IEEPA?

Raymond James analysts pointed out: "Section 122 balance-of-payments tariffs and Section 301 national-security tariffs are the most feasible options in the short term—the former allows tariffs of up to 15%, with a validity period of 150 days." They added that Trump administration officials have confirmed,The relevant emergency plan is actively being formulated.

Other options also include Section 201 tariffs and Section 338 tariffs. Thedford pointed out that the maximum effective period for Section 201 tariffs is 8 years, with a requirement for re-approval after the first 4 years, and the tariff rate must be gradually reduced after being in effect for 1 year. The maximum tariff rates for Section 122 and Section 338 tariffs are 15% and 50%, respectively, with Section 122 tariffs having an effective period limited to 150 days unless extended by Congress.

Tedford wrote, "However, compared to Section 301 and Section 201 tariffs, the advantage of Section 122 and Section 338 is that no investigation is required, which means the White House can almost immediately use them as a substitute for tariffs based on IEEPA."

Court ruling does not affect certain tariffs.

The sectoral tariffs imposed by Trump on imported automobiles and auto parts, as well as steel and aluminum products, were not affected by the court ruling last Friday.

The Trump administration also promised to impose tariffs on other industries that have already undergone trade investigations, such as imported pharmaceuticals, electronics, and furniture.

Possibility of a tax refund

Tedford stated that as Trump's tariffs based on the IEEPA face further setbacks, the issue of whether companies can obtain refunds for tariffs already paid is receiving increasing attention. He wrote that even if it does not take several months, such refund processes would take at least several weeks and could potentially become the largest tariff refund project in U.S. history.

The analyst team at Raymond James believes that this will have an impact on the market. They stated,The current tariff rebate "may lead to an increase in the issuance and yields of U.S. Treasury bonds."