Goldman Sachs interprets "U.S. Supreme Court tariff hearing": The outcome remains very close, results may come in December or January, refunds may take months, small countries may benefit, while large countries are less affected

Goldman Sachs pointed out in its latest report that the outcome of the U.S. Supreme Court's decision on tariff rulings remains very close, with a ruling expected in December 2025 or January 2026. Goldman Sachs believes that if the court makes an unfavorable ruling, the tariff landscape may not undergo a fundamental reversal.

According to news from the Wind Trading Desk, Goldman Sachs' chief economist Jan Hatzius' team released the latest report on November 5, providing an in-depth analysis of the oral arguments regarding presidential tariff powers before the U.S. Supreme Court.

The oral arguments on November 5, 2025, revealed that a majority of justices are skeptical about the president's authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), leading the market to lower the probability of the court maintaining the tariffs from 40% to around 30%. Goldman Sachs expects the court to make a ruling in December 2025 or January 2026.

Goldman Sachs believes that even if the court rejects the IEEPA tariffs, the Trump administration could still implement similar tariffs through other legal avenues, with the actual tariff rates likely decreasing by only about 1 percentage point. By the time of the court's ruling, the amount of tariffs collected is expected to reach $115 billion to $145 billion, and the refund process may take several months, meaning the impact of tariffs on the economy will persist.

Stalemate: Majority of Justices Skeptical, but Ruling Still Pending

The oral arguments revealed subtle divisions within the court. Goldman Sachs observed that a majority of justices are skeptical about whether the president has the authority to impose large-scale tariffs under the IEEPA. Currently, there are 4 justices who may oppose the government, 3 who support it, and 2 who lean towards opposition but could still swing either way.

Goldman Sachs stated:

• Three liberal justices (Jackson, Kagan, Sotomayor) explicitly questioned the government's position, while conservative justice Gorsuch also leans towards opposing the government based on congressional delegation of power issues. Supporting the government are conservative justices Alito and Thomas, with Kavanaugh showing some sympathy.
• The key swing votes are Barrett and Chief Justice Roberts. Barrett questioned whether Congress intended to grant broad tariff powers through the IEEPA but also explored whether the law implicitly includes taxing powers. Roberts raised the "major questions doctrine," pointing out that tariffs as a form of taxation are a core power of Congress rather than the president, while also acknowledging the importance of tariffs as a tool of foreign policy.

The betting odds in the prediction market also confirm this, as during the hearing, the market perceived the probability of tariffs being maintained dropping from 40% to 20%, eventually stabilizing around 30%. This indicates that a closely contested ruling is imminent.

If a partial maintenance situation occurs, Goldman Sachs expects that reciprocal tariffs are more likely to be overturned, contributing 6.2 percentage points to the effective tariff rate. Currently, the total IEEPA tariffs have raised the effective rate by about 7.6 percentage points.

Refund Process Complicated and Time-Consuming, Alternatives Prepared

Goldman Sachs believes that if the court rejects the tariffs, refunds will not occur automatically and may take several months or longer, depending on importers taking subsequent legal action. As of September, the government had collected approximately $89 billion in IEEPA tariffs. By the time of the court's ruling, this figure is expected to rise to $115 billion to $145 billionIt is worth noting that a ruling does not mean the end of tariffs. Goldman Sachs pointed out that the government has various alternative tools at its disposal:

If the Supreme Court rules that the IEEPA tariffs are invalid, the Trump administration may use other authorizations to replace most of the tariffs. Other statutes that the government can rely on include: Section 122 and Section 301 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962, and Section 338 of the Tariff Act of 1930. These statutes authorize the president to impose tariffs under specific circumstances (such as addressing trade unfairness or balance of payments deficits).

This means that even if the IEEPA authorization is rejected, the government can quickly re-implement similar tariffs through other statutes, especially against major trading partners. Therefore, Goldman Sachs assesses that the final outcome may be a slight reduction in tariffs for a few small trading partners, while the net impact on major trading partners is negligible. For the market, the uncertainty surrounding tariffs is far from over