It finally happened.
In a move that’s sending shockwaves through Washington and Wall Street alike, the Supreme Court just took a sledgehammer to President Trump’s sweeping global tariffs.
In a 6-3 ruling handed down today, the court decided the president didn’t have the legal authority to use a 1977 emergency law to tax almost everything coming into the country.
Tariffs aren’t gone completely; Trump has other ways to impose tariffs, and is widely expected to use them. They won’t be as widespread or capricious, however.
If you’ve been feeling the sting at the checkout counter over the last year, this is the news you’ve been waiting for. According to SCOTUSblog, a media site devoted to covering the U.S. Supreme Court, the justices ruled that the power to tax belongs to Congress, not the White House.
While the politicians argue about “separation of powers,” we’re interested in the “separation of dollars” from your pocket. Here’s how this landmark ruling is likely to change your financial life in the coming months.
1. Lower prices on big-ticket tech
If you’ve been putting off buying a new laptop or smartphone because of the “tariff tax,” you might want to start shopping again soon.
Over the last year, electronics prices jumped by 10% to 25% as companies passed the cost of imported chips and components directly to you.
Now that the legal floor has dropped out from under those duties, we should see those prices start to drift back down.
Related: See 9 Ways to Avoid Price Hikes Due to Tariffs
2. Relief at the car dealership
The auto industry was hit particularly hard by the administration’s trade policies. Between taxes on finished vehicles from Canada and Mexico and duties on imported parts, the average new car price spiked by thousands of dollars.
According to the Associated Press, the Supreme Court ruling effectively eliminates the 25% tariff on many imported passenger vehicles and light trucks. If you’re in the market for a new ride, this could mean a much more manageable monthly payment is on the horizon.
Related: See Why Car Prices Are Increasing — and How You Can Save
3. A break on your grocery bill
We’ve talked before about how tariffs act as a hidden tax on your dinner table (See The Tariff Trap: How You’re Footing the Bill for Global Trade Wars). Everything from Mexican avocados to Canadian berries saw price hikes because of these trade disputes.
With the Supreme Court striking down the broad reciprocal tariffs, the cost for grocery chains to bring in produce should drop. Keep a close eye on your local store’s flyers; you’ll likely see more aggressive sales as the cost of importing food settles down.
Related: See 8 Easy — but Often Forgotten — Ways to Save on Groceries
4. The “sticky price” reality check
Just because a company’s costs go down doesn’t mean they’ll immediately lower your prices. This is what economists call “sticky prices.”
Corporations have spent the last year training us to accept higher costs. They might try to keep their prices right where they are to pad their profit margins.
It’s up to us to be smart shoppers. If your favorite brand doesn’t lower its prices now that the tariffs are gone, it’s time to look for a competitor that’s willing to pass those savings along to you.
5. A potential refund windfall for businesses
One of the wildest parts of this ruling is the potential for $150 billion to $200 billion in refunds.
Companies that paid these taxes to the U.S. Treasury are now lining up to get their money back. While you probably won’t get a check in the mail directly from the government, this massive injection of cash into the business sector could prevent further layoffs and even spark some hiring.
It’s also likely to give the stock market a relief rally, which is good news for your 401(k).
The bottom line is that the era of “tariff-driven inflation” might finally be cooling off. We’ve spent months telling you how to stockpile and save, but now it’s time to shift gears.
Stay patient, keep your eyes on the labels, and don’t let retailers keep the savings that the Supreme Court just gave back to you.
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