Supreme Court Likely to Kill Trump Tariffs: Prediction Markets

Traders reduced the chances that the Supreme Court would uphold President Donald Trump’s aggressive tariffs after the justices’ hearing Wednesday signaled doubts on the legality of the administration’s broad trade powers.

In Kalshi’s case, contracts tied to whether the court ruled in favor of Trump’s tariffs dropped to about 30% from nearly 50% before Wednesday’s hearing.

A similar contract on Polymarket fell to about 30% from more than 40% earlier in the week, reflecting growing confidence among traders that judges could invalidate the policy.

The moves came after several conservative justices joined their liberal colleagues in expressing concern about the broad authority Trump asserted under the International Emergency Economic Powers Act to impose tariffs on imports. They asked sharply Solicitor General D. John Sauer on the Trump administration’s legal justification for tariffs, which critics say infringes on Congress’s taxing power.

Lower federal courts ruled that Trump did not have the legal authority to impose the so-called mutual tariffs on imports from many U.S. trading partners and fentanyl tariffs on products from Canada, China and Mexico.

Prediction markets, which allow investors to bet on real-world events, often respond quickly to signals received during high-profile court hearings. Wednesday’s change suggested that investors viewed the justices’ tone as a sign of setbacks for the president’s trade agenda.

The Supreme Court will not make a decision on this matter on Wednesday. It is not known when the court will announce its ruling.