TechFlow news, November 6 — According to Jinshi Data, UBS Group analysis indicates that if the U.S. Supreme Court rules Trump's tariff policies illegal, it would force the U.S. government to refund approximately $140 billion in tariffs to importers—equivalent to 7.9% of the projected federal budget deficit for fiscal year 2025. If the U.S. government loses the case, the massive tax refunds would immediately create fiscal shocks, while potentially leading to a structurally low-tariff trade environment. Should trading partners refrain from retaliatory measures, this scenario would ultimately benefit the U.S. economy and stock market. UBS estimates the government is likely to use legal tools such as Section 201 and Section 301 of the Trade Act of 1974 to rebuild tariff barriers, though this process would take several quarters and reduce flexibility in trade policy. While the refunds would bring windfall gains to importing firms, the impact on overall markets may be limited, as tariff costs have not significantly reduced S&P 500 earnings expectations. UBS believes the ruling could ultimately lower the overall effective tariff rate, boost household purchasing power, ease inflationary pressures, and provide the Federal Reserve with greater room for looser rate cuts. As long as trade partners avoid escalating retaliatory actions, this outcome would generally be welcomed by equity investors.
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