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This movement in trader expectations comes amid intense scrutiny of whether Trump exceeded his authority by imposing country-specific tariffs under an emergency-powers statute originally designed for national-security measures rather than trade policy. On November 5, 2025, Supreme Court justices including John Roberts and Neil Gorsuch raised probing questions about whether IEEPA gives the executive branch the constitutional power to impose taxes or tariffs without clear congressional delegation.
Why the prediction markets shifted
The precipitous drop in odds on both Kalshi and Polymarket follows strong signals during oral argument that the Court’s conservative majority may be less inclined to uphold the tariff regime. Late-day questioning touched directly on the so-called “major questions” doctrine whereby the Court holds that Congress must clearly authorise major policy shifts. Chief Justice Roberts told the Solicitor General the tariffs appear to be “the imposition of taxes on Americans, and that has always been the core power of Congress.”
Traders in the prediction-market space interpret such scepticism as a tangible sign that judicial outcomes may tilt against the administration’s interpretation of executive power. As the platforms’ contract prices dropped from nearly 40-45 % to the 25-30 % range it signalled a growing consensus that Trump’s tariff strategy could face a substantial legal blow.
Implications for markets and policymaking
The outcome of this case carries significant implications for U.S. trade policy, business planning and international economic relations. If the Court limits presidential tariff powers under IEEPA, it could restrict future administrations from adopting broad-scale import duties without explicit legislative backing. Prediction-markets like Kalshi and Polymarket are acting as a barometer of growing uncertainty, as capital flows adjust to a scenario in which the executive branch’s trade levers may narrow.
Financial markets are paying attention: a ruling against the tariffs could reduce trade-policy risk, reshape corporate supply-chain modelling and dampen inflation fears linked to broad import levies. Conversely, a ruling in favour of Trump would reinforce executive flexibility and possibly revive concerns over unpredictable trade actions. The contracts volume on these platforms exceeding US$1.3 million combining both sites demonstrates that observers are placing meaningful wagers on the legal outcome.
What to watch in the coming weeks
Experts and interested observers should track the following developments:
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The final opinion from the Supreme Court, expected within months of oral argument.
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Movement in contract prices on prediction markets, which may signal shifts in sentiment ahead of the ruling.
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Commentary from legal analysts on whether the Court will apply the major questions doctrine to restrict IEEPA usage for tariffs.
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Market reaction in trade‐sensitive sectors, including commodities, global supply chains and inflation-linked assets.
FAQs
Q1: What exactly are traders betting on in the Kalshi and Polymarket markets?
A1: Traders are placing bets on whether the Supreme Court will rule in favour of- or against- Trump’s tariffs, specifically whether the Court will uphold his use of IEEPA to impose sweeping import duties without clear congressional authorisation.
Q2: Why have the odds fallen dramatically in recent days?
A2: The odds declined after oral arguments revealed significant scepticism from justices especially conservative ones about the legal basis for using IEEPA in this manner. The prediction markets interpreted these signals as lowering the likelihood of a Trump victory.
Q3: Does this prediction-market activity predict the Court’s decision?
A3: While these markets reflect collective investor sentiment and perceived probability, they are not guarantees. They can provide a proxy for how informed participants are viewing the odds, but the actual Court ruling remains uncertain.
Q4: What happens if the Supreme Court rules against Trump’s tariff programme?
A4: A ruling against Trump could constrain future presidential trade actions under emergency-powers law, require refunds or adjustments for affected importers and shift trade-policy risk dynamics for markets and companies.
Q5: How could the ruling affect financial markets?
A5: A decision limiting executive tariff power may reduce trade-policy uncertainty, benefit supply-chain-sensitive firms, ease inflation fears tied to tariffs and shift capital expectations in sectors vulnerable to import duties.
Q6: Why do prediction markets like Kalshi and Polymarket matter in this context?
A6: These platforms aggregate the viewpoints of many traders who place real money based on perceived odds. They can act as early indicators of how market-savvy participants view legal, political and economic risks before institutional sentiment fully shifts.
