LPL Research: 8 reasons why the SCOTUS tariff win isn’t a total victory

Investing.com

Sat, February 21, 2026 at 2:53 PM GMT+9 3 min read

Investing.com – The U.S. trade landscape was upended on Friday after the Supreme Court ruled the Trump administration’s IEEPA-backed tariffs illegal. The decision effectively eliminates nearly half of the current tariff regime, including reciprocal levies on Canada, Mexico, and China, sparking a complex reaction across equity and bond markets.

While the ruling provides an immediate reprieve to importers, it does not fully eradicate the likelihood of future tariffs. President Trump already announced a new 10% global tariff. While this might look like a total victory for free trade, LPL Chief Equity Strategist Jeff Buchbinder warns that the reality is far more complex.

The 8 takeaways from the SCOTUS tariff ruling

1. A short-term boost for corporate America

Think of this as an accidental stimulus package. Since the IEEPA was the backbone for about half of the Trump administration’s tariffs, those costs are effectively vanishing overnight. For companies that were bracing for double-digit tariff rates, this is a sudden “tax cut” that should give profit margins a nice, healthy jolt in the coming weeks.

2. The relief might be short-lived

Don’t get too comfortable. President Trump has already signaled he’s pivoting to other laws, like Section 122 or Section 301, to bring those taxes back. LPL thinks as much as 90% of these “illegal” tariffs could be restored by summertime. In other words, the tariffs aren’t gone; they’re just getting a legal makeover.

3. Uncertainty is still the name of the game

While we have a court ruling, we don’t have total clarity. Markets are now obsessing over whether the government will actually be forced to pay back the billions already collected. Plus, it’s unclear how this affects our trade deals with neighbors like Canada and Mexico, though the USMCA should protect those relationships from the worst of the fallout.

4. Inflation won’t budge much

If you were hoping for a big drop in the price of groceries or electronics, you might be disappointed. Strategists point out that tariffs didn’t spike inflation as much as feared when they were put in place, so taking them away won’t lower prices much either. At most, we might see inflation drop by just a few tiny fractions of a percent.

5. The Fed likely won’t change course

The Federal Reserve isn’t expected to jump for joy or panic. On one hand, removing trade friction helps the economy grow; on the other, it removes a cost pressure that might have slowed things down. Because these forces cancel each other out, expect the Fed’s rate-cut path to stay largely the same, though the U.S. Dollar might lose a little bit of its recent strength.

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6. Don’t chase the “tariff losers” rally

You might see stocks for clothing retailers or car companies jump on this news, but LPL suggests you “fade the bounce.” Since replacement tariffs are already in the works, that relief rally is likely a trap. Instead, look toward homebuilders, industrial firms, or semiconductor stocks, which have a better chance of holding onto their gains.

7. The Treasury is feeling the squeeze

The government is already running a massive $1.8 trillion deficit, and losing tariff revenue only makes it worse. To make up for the lost cash, the Treasury will likely have to borrow more by issuing more short-term notes and bills. This extra supply of debt could end up pushing interest rates (yields) higher, even if only by a little.

8. The $175 billion refund cliff

This is the biggest “if” in the report. If the lower courts decide the government has to pay back the $175 billion in tariffs it collected illegally, the U.S. will have to find that money fast. Financing that kind of massive refund would require even more government borrowing, which could lead to a “steeper” yield curve as the government scrambles to pay back importers.

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