On Friday morning, the U.S. Supreme Court threw out Donald Trump’s trade tariffs. The decision seemed to remove a huge source of uncertainty from the market, but gold quickly resumed its steady rise as if nothing had happened, setting new daily highs as it continued on the same path it was on before the ruling was made public.
The majority opinion, written by conservative Chief Justice John Roberts, upheld a lower court’s decision that Trump did not have the power to impose tariffs under the International Emergency Economic Powers Act (IEEPA), which was passed in 1977. Trump’s use of this law went beyond his executive authority.”Today, all we have to do is decide if the president’s power to “regulate… importation,” which was given to him in IEEPA, includes the power to put tariffs on goods,” Roberts wrote in the decision. “It doesn’t.”
Roberts said “the president must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs.””He can’t.”
Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh all wrote dissenting opinions. They said that the ruling did not necessarily stop Trump “from imposing most if not all of these same kinds of tariffs under other statutory authorities.”
“The decision of the court is not likely to greatly limit the president’s ability to set tariffs going forward,” he said.
The White House didn’t say anything about the decision right away.
Gina Bolvin, President of Bolvin Wealth Management Group, told Kitco News that the market didn’t react much to the tax decision, which suggests that it was already priced in for the most part.
“The decision doesn’t have much of an effect on the economy because IEEPA tariffs only made up about 60% of those that were put in place,” she said, adding that retail stocks are doing well because people expect prices to go down.
“The ruling also raises expectations for inflation and makes rate cuts more likely as tariff-related headwinds ease, which is good for both businesses and consumers,” Bolvin said.
A spokesperson for LPL Financial, Jeff Buchbinder, told Kitco News that the story is not over yet.
The Supreme Court’s decision would only give the economy a short-term boost, he said. “But the Trump administration will quickly switch to different legal grounds for replacement tariffs while deficits go up in the meantime.” “However, if lower tariffs help keep inflation low, it could make people more likely to expect the Fed to cut rates later this year.”
Managing Partner at Harris Financial Group Jamie Cox said the decision is good for inflation and the rate path. However, he thinks the government will fight to keep as much of the money as possible.
“The Supreme Court’s decision will make it easier to cut rates more quickly because inflation fears caused by tariffs are no longer as strong,” he told Kitco News. “The big question is what new power the Administration will use to get some of the tariff money back.”
In the last trade, an ounce of spot gold was worth $5,070.84, which is a rise of 1.49% on the daily chart.
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