Video: What you’re not hearing about tomorrow’s Supreme Court case against Trump’s tariffs

V.O.S. Selections v. Trump and the consolidated cases against the IEEPA tariffs will have oral arguments in the Supreme Court tomorrow. We think the tariffs will be ruled unlawful. To the extent this is not expected fully by markets, it will be an upside event for both stocks and bonds, and some of that could come tomorrow if it seems the justices are leaning against the tariffs. We think least expected is the possibility that SCOTUS will order refunds. Depending on when the ruling comes, refunds could be about $100 billion, or about 3.7% of S&P 500 forward earnings. That would be a money-drop on corporate America greater than half an average year's earnings growth of 6%. Powell argues consumers ultimately pay the tariffs when corporate importers pass them on in the form of higher prices, leading to inflation. Trump argues that foreign sellers pay the tariffs. Either way, if true, then the refunds paid to American firms will be for taxes they never effectively paid in the first place. The government will argue it will cause chaos to have to process the refunds. But in April they avoided an injunction against collection of the tariffs by telling the court refunds could be made.