Jefferies Strategists Sound Alarm: Hedge Now Against Supreme Court Shock—Trump Tariffs Could Unleash Market Havoc

Grab your hedges. A legal curveball from the nation's highest court might be the trigger for the next wave of market chaos.

The Unthinkable Ruling

Analysts at Jefferies are flashing warning lights over a scenario most traders have dismissed: the Supreme Court unexpectedly upholding the Trump-era tariff framework. It's the political wildcard no algorithm priced in.

Volatility Is the Only Certainty

Such a ruling wouldn't just rewrite trade policy—it would send shockwaves through global supply chains and equity valuations overnight. Strategists argue the smart money isn't betting on the outcome, but protecting against the tail risk. The playbook? Look beyond traditional safe havens.

Enter the Digital Hedge

While gold and bonds get the usual nods, a segment of the market is looking elsewhere. Decentralized assets, operating on global, round-the-clock networks, present a compelling—if controversial—hedge against jurisdiction-specific political shocks. They don't care about Supreme Court dockets or border adjustments.

The Finance Jab

It's a classic move: the same institutions that lobby for regulatory moats suddenly need complex instruments to protect against the very policy uncertainty they help create. The fees, of course, are bulletproof.

The takeaway? In a world where legal precedent can flip on a dime, true portfolio resilience might just require thinking outside the traditional system. The next systemic shock could come from a bench, not a bank.

 Trade uncertainty may haunt markets all year

“If the Court upholds IEEPA tariffs, it likely green-lights continued use of tariffs as policy leverage,” the Jefferies note, seen by Bloomberg, said, talking about the 1977 International Emergency Economic Powers Act. “This WOULD keep trade-related headline risk elevated in 2026.”

Here’s where it gets interesting. If the Supreme Court says the tariffs are illegal, companies could be looking at refunds worth hundreds of billions of dollars total. But trade attorneys say don’t hold your breath, getting that money back could drag on.

Trump wrote Jan. 12 on social media that “it would take many years to figure out what number we are talking about and even who, when, and where to pay.” He called it “a complete mess, and almost impossible for our Country to pay.”

Import companies and customs experts aren’t buying it. They say the process should be straightforward since tariff payments are all documented.

Don’t expect stores to slash prices right away, either

Josh Ketter, who runs Spreetail, pointed out that “Retailers haven’t passed on the full cost of tariffs to consumers over the past year, instead they’ve seen their margins squeezed.” First priority for any refunds? “To make themselves financially whole again, so consumers expecting immediate price cuts are going to be disappointed.”

How would tariffs refund actually play out?

Michael Lowell from Reed Smith laid out how this might play out. “There is no set timeline on when refunds will be given back,” he said.

One way it could go is that the Supreme Court tosses the tariffs but sends the refund question to the Court of International Trade. That would mean months of arguments, probably heading back to the Supreme Court eventually. Another option has the Supreme Court ordering the CIT to start refunds directly.

Right now, the Justice Department and companies involved in tariff cases want the CIT to set up a steering committee to handle over 1,000 refund cases already filed, Lowell said.

Tim Keeler at Mayer Brown, who used to work for U.S. Trade Representative Susan Schwab, said steering committees usually handle this kind of thing. But he warned that everyone rushing for refunds at once could jam up the works. “Customs can take up to two years to process a protest,” Lowell noted. Post Summary Corrections are faster, “typically done in 30-45 days.”

Treasury Secretary Scott Bessent said Sunday it’s “very unlikely” the court overturns Trump’s emergency powers. As reported by Cryptopolitan earlier, Bessent has indicated the Treasury has sufficient funds to handle potential refunds, though he doesn’t expect to need them.

Even so, the administration has backup plans ready. Section 122 of the Trade Act of 1974 could bring 15% tariffs for five months. Section 301 allows country-by-country investigations. Section 338 of the Tariff Act of 1930 permits tariffs as high as 50%.

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