The Supreme Court's decision to invalidate key Trump-era tariffs may not translate into lower prices at the checkout counter, according to Goldman Sachs economists.
Supreme Court Blocks Tariffs Under Emergency Powers
On Friday, in a 6-3 ruling, the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) by President Donald Trump.
The White House introduced a 10% tariff through Section 122 and later boosted the rate to 15%.
On Sunday, Goldman Sachs Inc.
"We would not expect companies to lower prices in response to tariff reductions nearly as quickly as they increased them in response to tariff increases," the bank's economists wrote in a note cited by Business Insider.
Inflation Impact Already Reflected, Goldman Says
The firm estimates tariff passthrough has already lifted core Personal Consumption Expenditures, the Federal Reserve's preferred inflation gauge, by about 0.7% through January.
It projects only a modest additional 0.1% increase over the remainder of 2026.
Although the ruling eliminates some tariffs, Goldman estimates the effective tariff rate since the start of 2025 would decline only slightly from just over 10 percentage points to about 9 percentage points, leaving its broader inflation outlook largely unchanged.
Treasury Secretary Scott Bessent also cast doubt on refunds for roughly $180 billion in tariffs already collected, saying it was "unlikely" Americans would see the money returned.
Tariff Collections End After Supreme Court Ruling
California Gov. Gavin Newsom (D-Calif.) sharply criticized President Trump's trade policy after the Supreme Court struck down most tariffs, calling them "madness" and urging refunds of collected revenue.
He argued the policy was illegal from the start and cited economic concerns over inflation and GDP growth.
Separately, U.S. Customs and Border Protection ended tariff collections under the IIEEPA following the ruling and disabled related tariff codes.
However, tariffs under other provisions, including Section 232 and Section 301, remain in place.
U.S. Trade Representative Jamieson Greer said the White House would stand by its trade agreements with partners such as the European Union, Japan and South Korea, noting the deals were not dependent on the court's decision.
He acknowledged reduced flexibility without IEEPA authority but expressed confidence in continuity for the broader tariff program.
