Summary: Kalshi prices Trump winning the SCOTUS tariff case at 26%, but pre-argument expert consensus was ~50/50, and even post-argument analysts put fair odds at ~30–40%. The market crashed from 58% to 22% during oral arguments, but oral arguments are notoriously poor predictors of outcomes. Fair value is more likely ~40%.
Executive Summary
Kalshi prices Trump winning the SCOTUS tariff case at 26%, but pre-argument expert consensus was ~50/50, and even post-argument analysts put fair odds at ~30–40%. The market crashed from 58% to 22% during oral arguments on November 5, reacting to probing questioning from Chief Justice Roberts and associate justices Barrett and Gorsuch. But oral arguments are notoriously poor predictors of outcomes at the Court. The arguments also occurred the morning after a Democratic electoral sweep of key state elections, which may have inflated the conservative justices' visible skepticism. With a related market showing 3.4 expected YES votes (modal outcome: 3 votes at 41%), and Barrett floating a textually grounded "lesser included" theory to uphold, fair value is more likely ~40%.
| Metric | Value | |--------|-------| | Position | BUY YES at $0.26 | | Edge | ~14 percentage points | | Conviction | Medium (6/10) | | Market | Kalshi – Will SCOTUS rule for Trump's tariffs? | | Date | December 19, 2025 | | Volume | $1,542,186 | | Resolution | SCOTUS reverses Fed. Cir. before Jan 1, 2028 |
--• 1. The Market
Market Question
"Will the Supreme Court rule in favor of Trump's tariffs?"
Resolves YES if SCOTUS reverses the Federal Circuit's August 29, 2025, decision before January 1, 2028.
Case Overview
President Trump imposed sweeping tariffs using the International Emergency Economic Powers Act (IEEPA), citing trade deficits and fentanyl trafficking as national emergencies. The "Liberation Day" tariffs imposed a 10% baseline on virtually all imports, with rates up to 145% on imports from China and 25-35% on imports from Canada/Mexico. Lower courts ruled against the administration, with the Court of International Trade finding IEEPA doesn't authorize tariffs, and the Federal Circuit affirming 7-4 in August 2025. As of December 2025, the U.S. has collected more than $200 billion in tariffs under these measures.
Legal Significance
The core question: Does IEEPA's grant of power to "regulate importation" include authority to impose tariffs? The statute never mentions "tariffs" or "duties," and no president has used IEEPA for tariffs in its 50-year history. Critically, IEEPA was enacted in the 1970s after Watergate-era scandals specifically to rein in presidential emergency powers, not expand them. The Brennan Center notes that if the Court upholds Trump's use of IEEPA for tariffs, it "could cement a broad precedent for governing by emergency," allowing future presidents to "claim nonexistent emergencies to act unilaterally" across virtually any policy domain.
The stakes are enormous: $1.8 trillion in projected revenue over 10 years, $750B-$1T in potential refunds if struck down, and fundamental questions about separation of powers.
--• 2. The Consensus
Current Market Odds
• Trump Wins (YES): $0.26 (26% implied probability) • Trump Loses (NO): $0.74 (74% implied probability)
Price Movement (Key Insight)
!SCOTUS Tariffs Market Chart
The market has swung dramatically around the November 5 oral arguments:
• Pre-Arguments (Early Nov): YES peaked at 58%, reflecting pre-argument expert consensus of ~50/50 "coin toss." • During Arguments (Nov 5): YES crashed to ~22% by noon as Roberts, Barrett, and Gorsuch showed skepticism. The market dropped 36 points intraday. • Post-Arguments (Dec 19): YES has traded between 22–28%, currently at 26%, down ~32 points from pre-argument highs.
Question: Did the market overcorrect? Oral arguments are historically poor predictors, and the November 5 context (morning after Democratic sweep) may have inflated visible skepticism.
Expert Predictions
• Pre-Arguments: Former Solicitor General Elizabeth Prelogar called it "almost a coin toss." Cato's Scott Lincicome, Raymond James, and Veda Partners all said ~50/50. • Post-Arguments: David Lat predicts 6-3 against but says "government win remains possible" at 5-4. Jonathan Turley: "real chance of fractured decision" favoring Trump. Stan Veuger (Yale): ~70-30 against, meaning ~30% for Trump. • Administration View (Dec 17): White House trade advisor Peter Navarro said he feels "very optimistic" about the case, arguing the administration has "a very strong legal argument" and that oral arguments were mischaracterized by the press.
Crowd Narrative
The market reacted to visible skepticism from Roberts, Barrett, and Gorsuch, but experts emphasize oral arguments are poor predictors, as justices often probe the side they ultimately support.
--• 3. The Alpha
Position: Trump is Undervalued
| Metric | Value | |--------|-------| | Market Price | 26% | | Fair Value Estimate | ~40% | | Edge | ~14 percentage points (BUY YES) |
Fair Value Methodology
Pre-argument expert consensus was ~50%. Post-argument shift to ~30%. Adding ~10 points for oral-argument misprediction risk, Barrett's lesser-included theory, the Court's pattern of Trump deference, and transient election-night context yields ~40% fair value.
Supporting Evidence
1. Oral Arguments Are Poor Predictors of Outcomes
Justices routinely grill the side they ultimately support. The actual vote occurred at the Friday conference, days removed from the argument dynamics. History shows limited correlation between argument tone and outcomes. Navarro argues the press "didn't do a fair job of handicapping the race" based on oral arguments.
2. Election Night Context Inflated Visible Skepticism
Arguments occurred the morning after Democrats swept Virginia, New Jersey, and NYC (Zohran Mamdani's mayoral win). Conservative justices may have been performing "independence." University of Michigan Law professor Leah Litman noted that the "Tuesday night hangover" may have influenced optics but will fade by the time opinions are written.
3. Barrett's "Lesser Included" Theory Provides Doctrinal Off-Ramp
Justice Barrett floated a textually grounded rationale: if IEEPA grants embargo power (blocking all trade), perhaps tariffs are a "lesser included" power. This gives the 5th vote a principled pathway to uphold. Pacific Legal Foundation analysts believe this signals Barrett may be "in the camp of affirming." Navarro cited this at oral arguments, noting Barrett said striking down tariffs would be "a mess."
4. Court's Unbroken Pattern of Trump Deference
In 24 emergency docket cases, this Court has consistently backed Trump's executive authority claims, including the travel ban, the immunity ruling, the passport case, and more. As former prosecutor Neama Rahmani notes, "They've generally been deferential to him... Historically, when it comes to matters of foreign policy and national security, they've always sided with the executive branch."
5. Federal Circuit Was 7-4, Not Unanimous
Four appellate judges would have upheld the tariffs. This lower decision was well short of a unanimous "smackdown," instead signaling that there is a legitimate legal basis for the administration's position, which four judges found persuasive. The dissent argued IEEPA allows "broad emergency authority in this foreign-affairs realm, which unsurprisingly extends beyond authorities available under non-emergency laws." Navarro calls this dissent "a roadmap for the Supreme Court."
6. Expert Language Suggests ~30-40%, Not 26%
Even bearish post-argument analysts use language like "possible," "coin flip," and "~70-30." Stan Veuger's 70% against still implies 30% for Trump. The market at 26% is pricing in more certainty than experts express.
Risk Factors
• Roberts & Barrett Both Skeptical: Both raised serious textual objections. If neither flips, it's 6-3 against. • Major Questions Doctrine: Roberts authored West Virginia v. EPA. Claims of vast economic significance without clear Congressional authorization are disfavored. • Gorsuch's Non-Delegation Concerns: He grilled Sauer extensively. If he votes with liberals, the administration needs both Roberts AND Barrett. • Separation of Powers Framing: The Constitution assigns Congress, not the president, the power to "lay and collect duties." Ruling for Trump could "dramatically upset the balance of power between the president and Congress." • Timing Signal: Legal expert Peter Harrell notes, "If we get into the spring and there's no ruling, that's a pretty strong signal that the court is going to uphold the tariffs." Treasury Secretary Bessent now expects a ruling in January.
Catalysts to Watch
• January Ruling: Decision now expected in January per Treasury Secretary Bessent (December 16 interview). Timing and vote count will move markets. • Fractured Opinion: A narrow or fractured ruling (e.g., upholding fentanyl tariffs but striking reciprocal tariffs) could produce a partial win. • Refund Logistics: With $200B+ now collected, the Court may seek a limiting principle to avoid massive refund chaos. Barrett expressed concern that reimbursements would be "a complete mess." • Alternative Authorities: Even if IEEPA tariffs are struck down, Bessent says the administration can "recreate the exact tariff structure" using Sections 301, 232, and 122 of the Trade Act.
--• 4. Bottom Line
Position: BUY YES at $0.26
Conviction: Medium (6/10)
Thesis: The market crashed 36 points during oral arguments, but expert consensus never moved that dramatically. Pre-argument experts called it a "coin toss"; post-argument experts say ~70–30, not 74–26. With Barrett floating a textual off-ramp, the Court's unbroken pattern of Trump deference, the transient election-night context, and the administration expressing confidence in its legal position, 26% is too low. Fair value: ~40%.
Justice-by-Justice Assessment
| Justice | Vote | Notes | |---------|------|-------| | Thomas | YES | Strong executive power views; supportive at argument | | Alito | YES | Actively constructed pro-tariff rationales | | Kavanaugh | LEAN YES | Emphasized Yoshida precedent; votes with the majority 90% | | Roberts | TOSS-UP | Skeptical, but raised foreign policy deference | | Barrett | LEAN NO | Skeptical, but floated "lesser included" theory and expressed concern about refund "mess" | | Gorsuch | NO | Strong non-delegation concerns; grilled Sauer during arguments | | Kagan | NO | Liberal bloc united against | | Sotomayor | NO | Liberal bloc united against | | Jackson | NO | Liberal bloc united against |
Path to 5: Thomas + Alito + Kavanaugh (3 solid) + Roberts + Barrett. Need both swing votes. If Barrett's lesser included theory persuades Roberts on foreign affairs grounds, the administration wins 5-4.
---• This content is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Prediction markets involve risk, and past performance does not guarantee future results. Always conduct your own research before making any trading decisions