Wall Street Doubles Down Against Trump’s Trade Deals as Supreme Court Showdown Looms

Wall Street’s betting big—and it’s not on Trump. As lawsuits targeting the former president’s trade policies advance to the Supreme Court, financiers are hedging against chaos. Here’s why the smart money’s bracing for impact.

### The Legal Gauntlet: Trump’s Trade Deals Under Fire

With the Supreme Court now in play, Wall Street’s laser-focused on the fallout. No one’s placing friendly wagers—just cold, calculated shorts.

### Hedge Funds vs. The Oval Office: A High-Stakes Standoff

When lawsuits hit SCOTUS, markets flinch. And this time? The Street’s already pricing in turbulence—because nothing screams 'stable investment' like a political circus.

### The Bottom Line: Chaos Sells (But Nobody’s Buying)

Wall Street’s playing both sides—because why pick a winner when you can profit from the mess? Bonus cynicism: If lawsuits were tradable assets, hedge funds would’ve securitized them by now.

Federal judges already ruled Trump went too far

The lawsuits didn’t come out of nowhere. For months, small businesses and state attorneys have been pushing back against Trump’s trade moves. His administration used IEEPA as the legal shield for a long list of tariffs, including the 10% minimum tariff, the fentanyl-related duties on China, Canada, and Mexico, and the reciprocal tariffs he announced in early April.

In late May, the U.S. Court of International Trade struck down those tariffs, saying Trump exceeded what the law allows. The IEEPA does give the president emergency powers, but only to deal with “unusual and extraordinary threats” from outside the U.S.

And lawyers for the plaintiffs say that has nothing to do with what Trump is doing. “IEEPA nowhere mentions tariffs, duties, imports, or taxes, and no other President in the statute’s nearly 50-year history has claimed that it authorizes tariffs,” they wrote in court.

The Trump team argues otherwise. They say Congress has always let presidents use tariffs to protect U.S. interests. Their case rests on one line in the law that allows regulation of “importation,” which they claim gives the president the power to set tariffs however he wants.

That argument didn’t fly in the V.O.S. case. The court found multiple instances where Trump had imposed tariffs outside the scope of IEEPA. Another blow came just one day later from a federal court in Washington, D.C.

In Learning Resources, Inc. v. Trump, Judge Rudolph Contreras ruled even more aggressively, saying IEEPA doesn’t allow any kind of unilateral tariff action at all. His ruling got appealed, and arguments are scheduled for September 30.

Supreme Court likely to step in as pressure builds

Even though the appeals court hasn’t ruled yet, everyone watching expects this case to end up at the Supreme Court. The court has a 6-3 conservative majority, including three justices whom Trump appointed himself.

But despite that, analysts from Piper Sandler say the odds still aren’t in his favor. “Trump will probably continue to lose in the lower courts, and we believe the Supreme Court is highly unlikely to rule in his favor,” they wrote in a note on Friday.

And if the Supreme Court does strike the tariffs down, it won’t just be a policy setback. It WOULD take out almost every trade deal announced in the past six months. Piper Sandler said: “If the Supreme Court rules against Trump, all of the trade deals Trump has reached in recent weeks, and those he will reach in the coming days, are illegal.”

That includes 25 letters recently sent to world leaders, outlining the new tariffs that will hit their countries’ U.S. exports starting August 1. Those letters didn’t mention IEEPA by name, but the arguments inside them, about trade deficits, unfair practices, and national security, matched everything Trump said when he first invoked the law in April.

He also signed an executive order in June that officially tied IEEPA to a trade deal with the United Kingdom. Meanwhile, he’s been tossing out deal outlines with Japan, Vietnam, Indonesia, and the Philippines, though none of those have been finalized.

The legal mess keeps growing. Two more lawsuits are heading to the Ninth Circuit on September 17. One was filed by California, the other by members of the Blackfeet Nation in Montana. On top of that, at least three other cases at the Court of International Trade are on hold until V.O.S. is resolved.

All of this means one thing: if the Supreme Court rules that Trump misused emergency powers, the whole structure collapses. Every deal. Every tariff. Every letter. Every percentage point. Gone.

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