20.02.2026 - US Court strikes down tariffs

The US Supreme Court ruled (6–3) that the legal framework underpinning the Trump-era import tariffs does not “authorize the President to impose such duties”. This landmark decision removes a major pillar of recent US trade policy — but opens a new layer of legal, fiscal and political uncertainty.

Market reaction: (initial moves)

• Equities: Jumped on relief and hopes for lower input costs, less trade friction

• Bonds: US yields moved higher (10y ~4.10%), reflecting fiscal concerns

• Currencies: USD weakened

• Commodities: Precious metals paused their rally

• Cryptos: Risk-on bounce, Bitcoin back around USD 68k

• Volatility: VIX lower on relief

My View: not a moment to add risk

This ruling is not a clean positive catalyst for risk assets. Risks and uncertainties remain, even increase:

• Legal & implementation uncertainty:
  What happens to tariffs already paid? Refund mechanisms could take years and trigger lawsuits. Corporate cash flows and balance sheets remain exposed to administrative and legal friction.

• Fiscal implications:
  Tariffs effectively acted as a revenue source. With US debt already elevated, the removal of this income stream implies higher Treasury issuance, structurally higher yields, and rising fiscal risk premia.

• Policy unpredictability:
  Trade policy remains hostage to political cycles. The risk of abrupt reversals (tariffs off today, back tomorrow via another legal route) keeps uncertainty elevated for corporates and investors.

What I expect from here:

• Weaker USD on political risk and twin deficits

• Higher US yields as fiscal supply pressure rises

• Fragile risk assets: equities and cryptos vulnerable once the relief rally fades

• Precious metals remain structurally supported by USD weakness and elevated uncertainty, despite short-term consolidation

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