Why removing the trade barrier overhang might act like “rocket fuel” for equities
A decision by the courts to strike down the tariffs introduced by Donald Trump would not simply be a trade policy victory—it could spark a broad-based equity rally. Investors view the removal of tariffs as a convergence of three powerful drivers: lower corporate costs, easing inflation pressure, and restored global trade confidence.
Cheaper Inputs, Bigger Margins
Tariffs function like invisible taxes on imported goods, increasing expenses for companies that rely on overseas supply chains. For firms in manufacturing, consumer goods and technology, this has meant squeezed margins.
With the tariffs gone, many businesses stand to see production costs fall and earnings improve.
As Jim Cramer, host of CNBC’s Mad Money and one of America’s most prominent financial commentators, put it recently:
“I feel like a sucker… They screwed it up. I was very let down… This is what they come up with?” TheStreet+1
His blunt assessment points to how unexpected – and unwelcome – the market found the earlier tariff shock.
Inflation Relief and the Fed Implication
Tariffs also raise consumer-prices indirectly, adding to inflation and complicating monetary policy. Removing them could mark a disinflationary impulse—one that gives the Federal Reserve more headroom to either ease rates or delay tightening, which tends to boost equity valuations.
From Scott Bessent, Treasury Secretary:
“Neither side thinks the status quo is sustainable.” AP News+1
In his view, the existing tariff regime is not viable long-term—an acknowledgment that a policy pivot may arrive.
Restoring Global Trade Confidence
Tariffs have unsettled supply chains, upset traditional allies and raised business uncertainty. A ruling that overturns them would send a powerful signal: the U.S. is stepping back from protectionist escalation, and global trade risk is diminishing.
International voices are already reacting. For example, Anthony Albanese, Prime Minister of Australia, argued:
“The administration’s tariffs have no basis in logic … It is the American people who will pay the biggest price.” The Washington Post+1
Though external to U.S. markets, such remarks underscore how the uncertainty has rippled internationally.
Sectoral Winners
- Manufacturing & Industrials: Lower input costs, less tariff-drag on exports.
- Retail & Consumer Goods: Import-price pressures ease and margins improve.
- Technology / Global Supply Chains: Trade-friction risk reduced.
- Emerging Markets: A retreat of U.S. trade tensions can lift risk appetite globally.
Quotes From the Front-Lines
From the Administration
Donald Trump himself has weighed in:
“If a Radical Left Court ruled against us … it would be 1929 all over again, a GREAT DEPRESSION… It would be impossible to ever recover.” CNBC
He asserted that tariffs have had a “huge positive impact” on the stock market and warned courts against striking them down.
From a Market Practitioner
Ken Griffin, founder of Citadel, warned of the cost of uncertainty:
“The uncertainty and chaos created by the tariff dynamics between us and our allies is an impediment to growth.” Reuters
He highlighted how unpredictable trade policy is weighing on business planning.
From a Political Opponent
Ted Cruz, U.S. Senator, criticised the policy:
“A trade war ‘would destroy jobs here at home and do real damage to the U.S. economy.’ … ‘If we go into a recession, … you would face a Democrat House and you might even face a Democrat Senate.’” Houston Chronicle+1
The message: market risk, political risk and economic risk are intertwined.
The Bottom Line
If the courts rule that Trump-era tariffs are unlawful, the scenario is compelling: input costs drop, inflation eases, global trade improves—and those are all positive for equities.
For investors, this isn’t just a legal story—it is an earnings, inflation, and confidence story. That’s what makes analysts say it could act like rocket fuel for stocks.
