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The U.S. geopolitical and financial landscape has been rocked by an institutional earthquake unprecedented in modern history. While the Supreme Court attempted to rein in Donald Trump’s aggressive tariff policy, the President’s response has triggered a regulatory chaos that global investors must learn to navigate quickly. For YAIN, we analyze how this power struggle is redefining portfolio risks and opportunities for the medium-to-long term.
The Legal Earthquake: The "Learning Resources" Ruling
It all stems from the historic 6-3 ruling in Learning Resources, Inc. v. Trump. The Supreme Court ruled that the massive use of the International Emergency Economic Powers Act (IEEPA) to impose blanket tariffs (ranging from 10% to 50%) is unconstitutional.
The IEEPA is the 1977 law Trump used as a "crowbar." Originally designed to freeze the assets of dictators or terrorists during a "national emergency," Trump repurposed it to impose general tariffs, claiming the trade deficit constituted an emergency. Chief Justice John Roberts made a fundamental point clear: the President cannot declare a permanent "national emergency" simply to launch a global trade war. Such power belongs to Congress (Article I of the Constitution). In theory, this decision should have instantly nullified billions of dollars in tariffs.
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Trump’s Countermove: The 15% "Temporary" Tariff
Instead of retreating, the Trump administration demonstrated unparalleled tactical flexibility (and legal audacity). On Friday, February 20, 2026, the White House activated a "Plan B" to bypass the ruling:
Invoking Section 122: Trump dusted off a provision of the Trade Act of 1974 that allows the President to impose tariffs of up to 15% for a maximum of 150 days in cases of "serious balance-of-payments imbalances."
The Escalation: He didn't just maintain the tariffs; he raised the stakes, increasing them from the initial 10% to 15%.
The "Recursion" Nightmare: The strategy is clear: issue temporary tariffs, let them expire, and immediately re-impose them under a new technical justification. This creates a legal "gray zone" that could take years to resolve in court.
Investors must consider the political reaction. If these companies win multi-billion dollar lawsuits, the White House could respond with even heavier targeted tariffs via Section 301 (unfair trade practices) and Section 232 (national security), which are much harder to challenge than IEEPA. Section 301 and Section 232 are the laws that Trump (and partly Biden) were already using.
Section 301: Used to punish “unfair trade practices” (e.g., intellectual property theft by China).
Section 232: Used to protect sectors critical to national security (such as steel and aluminum). These tariffs were not affected by the Supreme Court ruling and remain in effect.
Advice for the YAINer: Don't just look at the theoretical refund. Look at the company’s debt structure. Firms that use refunds to deleverage in a high-rate environment (caused by tariff-driven inflation) will be the true long-term winners.
The Refund "Jackpot": Billions at Stake
The most disruptive aspect for equity investors is the ruling’s retroactivity. If tariffs imposed in 2025 via IEEPA were unlawful, must the government return the money? According to analyses by Il Post and The New York Times, the issue of customs refunds is becoming a central theme for multinational CFOs.
The 180-Day Window: Companies have a limited timeframe to contest the "liquidation" of goods and request the return of paid duties.
Balance Sheet Impact: For some giants, potential refunds could reach billions. These unexpected cash flows would act as a massive private fiscal stimulus, potentially boosting net earnings and fueling new buyback plans.
Federal Budget Risk: Conversely, the U.S. Treasury faces a potential black hole. Refunding these sums while trying to fund new tax cuts could lead to an explosion in public debt and upward pressure on 10-year Treasury yields.
These are the most likely candidates to this rebate:
Consumer Retailers: These giants import massive volumes of finished goods. As they often operate on thin margins, tariffs were a heavy burden on their 2025 books.
Walmart — $WMT ( ▲ 2.8% ): It is the largest US importer. Although it has diversified, its dependence on Asian manufacturing for electronics and textiles is massive. A refund on 2025 tariffs could be worth hundreds of millions of dollars in extra net profit.
Target — $TGT ( ▼ 2.64% ): Similar to Walmart, but with a slightly tighter supply chain. Target has previously reported the negative impact of tariffs on margins; recouping these sums would be an immediate bullish catalyst.
Costco — $COST ( ▲ 0.13% ): Known for its logistical efficiency, Costco has already led legal battles against tariffs in the past. It is one of the most active companies in monitoring the 180-day deadlines for customs appeals.
Tech & Hardware: The tech sector paid duties on essential components (chips, semiconductors) that are hard to source outside China. Refunds could significantly improve gross margins by late 2026.
Apple — $AAPL ( ▲ 1.64% ): Despite efforts to shift production to India and Vietnam, the iPhone/Mac ecosystem still relies heavily on cross-border flows subject to Trump's tariffs. Component rebates could improve gross margins as early as Q3/Q4 2026.
HP Inc. — $HPQ ( ▼ 1.64% ) & Dell — $DELL ( ▼ 1.63% ): The PC and laptop market is extremely sensitive to component costs. These companies have had to absorb part of the tariff costs to remain competitive; the reimbursement would act as a “hidden” extraordinary dividend.
Automotive: Despite Section 232 (steel) duties remaining, general IEEPA tariffs hit thousands of mechanical and electronic parts.
Ford — $F ( ▼ 2.78% ) & General Motors — $GM ( ▼ 2.79% ): They have integrated assembly lines between the US, Mexico, and Asia. Legal uncertainty over tariffs weighed on their valuations throughout 2025.
Long-Term Implications for Investors
The End of Legal Certainty: For decades, investors banked on U.S. regulatory stability. That certainty is gone. Trump’s "ignore and bypass" strategy introduces a permanent Political Risk Premium on U.S. equities.
Inflationary Headwinds and the Fed: 15% tariffs, even if "temporary," act as a hidden tax on consumers. This makes the Federal Reserve's job nearly impossible, potentially stifling economic growth through 2027.
Winners and Losers: Sectors with thin margins and high Asian dependency (low-cost electronics/apparel) are the primary losers. Winners include companies with strong pricing power and those successful in their legal battles for refunds.
Conclusions: What to Do Now?
The match between Trump and the Supreme Court is a war of attrition. YAINers
Monitor legal filings: Companies filing aggressive protests for tariff refunds could be the "positive surprises" of upcoming earnings seasons.
Prioritize flexibility: Favor companies that have already diversified production to Mexico or India, reducing exposure to the "Section 122" chaos.
Watch the Dollar: Trade volatility usually strengthens the USD in the short term, but institutional uncertainty could weaken it long-term if trust in the U.S. legal system falters.
The market hates uncertainty, but for the savvy investor, the regulatory chaos created by Trump’s temporary tariffs offers an opportunity to position into stocks the market is currently undervaluing due to excessive fear.
Just one final fun fact: it is not clear whether it is just a deep fake, but someone with the exact same voice of President Trump called C-SPAN to complain about the SCOTUS sentence: I know it can’t be, but part of me really wants to believe President Trump is just like any other old guy who would call the TV to complain about the things he does not like.