All attention is focused on the United States Supreme Court this Friday, January 9, as it prepares to deliver a landmark ruling on the legality of tariffs imposed by President Donald Trump on America's trade partners. This marks the first time the nation's highest court will adjudicate on the sweeping tariffs that have defined Trump's trade policy.
The Legal Challenge to Presidential Authority
The core question before the justices is whether President Trump overstepped his authority by invoking the International Emergency Economic Powers Act (IEEPA) to levy tariffs without explicit approval from Congress. Last year, on April 2—a date Trump termed "Liberation Day"—he imposed tariffs ranging from 10% to 50% on various imports.
Lower federal courts have already found that many of these tariffs exceeded presidential powers under existing statutes. They argued that the law used by the administration does not grant the president broad authority to impose such import duties, a power traditionally reserved for the legislative branch under the US Constitution. During arguments on November 5, the court's 6-3 conservative majority reportedly expressed "deep concerns" over the administration's use of federal law to justify the tariffs.
Potential Windfall for Indian Markets
Financial experts in India are closely watching the proceedings, with many anticipating a ruling against the Trump administration. Such an outcome could trigger a positive rally in the Indian stock market, which has been among the hardest hit by the tariffs, particularly the steep 50% duties.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted a high probability of the verdict going against Trump. "The details are significant: that is, whether it would be a partial striking down of the tariffs or completely declaring the tariffs illegal," he stated. He emphasised that a complete declaration of illegality would be a major blow to Trump and very favourable for markets like India.
Vijayakumar explained the legal reasoning likely to influence the court: "The argument is that this was done under emergency provisions citing a widening US trade deficit. That deficit is not something that happened overnight; it has been there for over 15 years. A problem hanging fire for 15 years cannot be addressed using emergency powers. So, that is a valid argument."
Broader Implications and Precious Metals Outlook
Even a favourable ruling may offer only temporary relief to global markets. President Trump retains the option to seek Congressional approval for the tariffs. For India, securing a trade deal with the US remains critical, especially amid Trump's renewed aggression against nations importing Russian oil. On January 7, Republican Senator Lindsey Graham indicated Trump's support for a Russia sanctions bill that could raise US tariffs to at least 500% on countries purchasing Russian oil.
The ruling's uncertainty is also a factor for commodity markets. Increased geopolitical and trade tension is generally considered positive for safe-haven assets like gold and silver. However, analysts expect near-term volatility driven by the dollar, bond markets, and other developments.
Anuj Gupta, a SEBI-registered analyst, highlighted key levels for gold. In international markets, he sees strong support at $4,300-$4,400, with resistance at $4,500 and further near $4,700. Domestically, the crucial support zone is ₹1,20,000–₹1,30,000, with resistance around ₹1,42,000 and approximately ₹1,50,000.
The Supreme Court's decision, expected around 10:00 a.m. Eastern Time, will thus have significant ramifications for US trade policy, its fiscal health, and financial markets across the globe, with India poised for a notable reaction.
