Supreme Court Tariff Case Sparks Market Uncertainty

According to Cointelegraph, prediction markets are showing decreased confidence in the likelihood that the U.S. Supreme Court will support U.S. President Donald Trump's extensive tariff powers. Traders on both regulated and crypto-native platforms have reduced their exposure following recent developments. On Thursday, the U.S.-regulated event-market platform Kalshi indicated that traders now assign a 29% chance that the Supreme Court will side with Trump, marking a 28-point drop in just one day. Polymarket, Kalshi’s on-chain competitor where contracts are settled in USDC, reflected a similar sentiment collapse, with odds falling to 25%. The combined trading volume across both platforms exceeded $1.3 million, demonstrating that traders in prediction markets can offer early indicators of sentiment related to political and judicial outcomes. The markets have been volatile since the Supreme Court agreed to hear the case in September, but Wednesday saw the largest single-day decline since the market went live. The price fluctuations suggest that traders increasingly anticipate the Supreme Court will limit the presidential authority to impose tariffs under the emergency-powers law. Such a decision could significantly alter how U.S. presidents utilize fiscal leverage and trade policy. The alignment between Kalshi and Polymarket odds underscores a growing convergence between traditional and decentralized forecasting markets, where both fiat-based and blockchain-based traders assess political risks through similar lenses of liquidity and probability. The sell-offs followed reports that several conservative justices expressed skepticism regarding Trump's claim to unilaterally impose broad import duties using emergency powers. On Wednesday, the Supreme Court conducted hours of oral arguments on one of the most significant cases of the presidential term, challenging whether the president can rely on a 1977 emergency law to impose tariffs without congressional approval. An Associated Press report highlighted concerns among even Trump-appointed justices about the separation of powers and the potential concentration of fiscal authority in the executive branch. Chief Justice John Roberts, Justice Neil Gorsuch, and Justice Amy Coney Barrett reportedly questioned the U.S. government on whether the 1977 International Emergency Economic Powers Act grants such expansive authority. Barrett questioned the necessity of targeting countries like Spain and France, while Roberts emphasized that tariffs, as taxes, have traditionally been under congressional control. Meanwhile, Gorsuch warned that granting the executive branch such leeway could lead to unchecked presidential power. Trump's trade policies have historically impacted crypto markets. Previous tariffs fueled inflation fears and prompted traders to view Bitcoin as a hedge against fiscal instability. However, tariff-driven uncertainty has also occasionally triggered risk-off sentiment, leading to short-term sell-offs as investors shifted to safer assets.