Is Trump's tariff unconstitutional? The Supreme Court announced on Friday that only 28% of people are optimistic about a reversal.

Forecast markets believe the Supreme Court is unlikely to support Trump’s tariffs. Polymarket shows only 28%, Kalshi at 32%. Over $2.6 million in bets. Opinion Day is scheduled for Friday, with a 53% chance of a ruling before January 16. The US Court of Appeals last year ruled that Trump exceeded his authority by using emergency powers to impose tariffs.

Polymarket $2.6 million bet aligns with 28% chance of victory

Polymarket’s market consensus for overturning or rescinding the previous ruling that declared Trump’s tariff policy “unconstitutional” is 28%, up from 22% a week ago, but still far below the peak reached in September 2025. So far, the total betting amount has exceeded $2.6 million, making it one of the highest-volume bets on the Polygon platform. Meanwhile, bettors on Kalshi believe there is a 32% chance the Supreme Court will rule in Trump’s favor.

This low win probability consensus reflects widespread pessimism among legal experts. The US Court of Appeals last year ruled that Trump exceeded his authority by broadly imposing tariffs using emergency powers. This decision was based on the textual interpretation of the International Emergency Economic Powers Act (IEEPA), which the appellate court believed authorizes the President to respond to “unusual and extraordinary threats,” not for routine trade policy. If the Supreme Court upholds this ruling, it would mean Trump’s tariff policies lack a legal basis.

The probability distribution in forecast markets is highly informative. A 28% to 32% chance of victory indicates that the market considers Trump’s win as “possible but unlikely.” This probabilistic pricing reflects real-money risk assessment, more direct than polls or expert opinions. When millions of dollars are wagered on an outcome, these bettors typically conduct in-depth legal analysis and intelligence gathering.

Three key data points on market bets regarding Trump’s tariffs

Polymarket win probability: 28% (up from 22% last week but still low)

Kalshi win probability: 32% (slightly higher than Polymarket but still well below 50%)

Total betting amount: over $2.6 million (real-money risk pricing)

The Supreme Court has scheduled Opinion Day for Friday, with Kalshi bettors assigning a 53% chance that the court will issue its opinion before January 16. This timing forecast also holds market significance. If the court indeed issues a ruling as scheduled, the market could experience significant volatility on Friday. If Trump wins (though unlikely), the tariff policy would be legally validated, potentially causing stocks of importers and consumer goods companies to plummet. If he loses, tariffs may be invalidated, trading partners could breathe easier, and global stock markets might rebound.

Interestingly, Polymarket’s win probability has risen from 22% last week to 28% this week, indicating a slight increase in market expectation of Trump’s victory. This may reflect signals released by Trump’s team or a reassessment of the conservative majority on the Supreme Court. Currently, 6 of the 9 justices were appointed by Republican presidents (including 3 by Trump himself), which theoretically favors a more lenient interpretation of executive powers. However, even under these favorable conditions, the market still assigns less than a one-in-three chance of Trump winning, highlighting the fragility of legal arguments.

Economic consequences of tariff defeat and market betting logic

Earlier this week, Trump stated that if the Supreme Court rules against the federal government, the US could face significant economic consequences. This threatening rhetoric is a typical negotiation tactic for Trump, aiming to pressure the court. However, the US Supreme Court is known for its independence, and historically, it rarely changes rulings due to political pressure.

Interestingly, Treasury Secretary Scott Bessent said last week that if the court rules against the government, the Treasury has enough funds to pay any potential tariff refunds. This statement contrasts with Trump’s “economic consequences” narrative. Bessent’s pragmatic stance may reflect internal government preparations for a loss, further reducing external confidence in a Trump victory.

Since taking office in January 2025, Trump has used the International Emergency Economic Powers Act to justify tariffs on various countries to address trade imbalances. However, the US Court of Appeals last year ruled that Trump exceeded his authority by broadly imposing tariffs using emergency powers. The core logic of this ruling is “separation of powers”: Congress holds the constitutional authority over foreign trade, and the President can only exercise powers within the scope granted by Congress. If the President can unilaterally impose tariffs on any country, Congress’s trade authority becomes meaningless.

Economist Mark Zandi states that the labor market has been struggling under tariff pressures, and a Supreme Court ruling could be the fastest way to restore employment growth. This highlights the economic costs of tariff policies. When import prices rise due to tariffs, consumer purchasing power declines, business costs increase, leading to layoffs and reduced employment. If the court rules tariffs unconstitutional and forces their cancellation, short-term effects could include falling import prices and a consumer recovery.

Trade tariffs have been one of the most closely watched trends in the markets over the past year, and the upcoming decision could influence early 2026 market directions. If Trump wins, tariffs will be legally validated, and he may further expand tariff scope. If he loses, existing tariffs could be canceled, and future presidents attempting to bypass Congress to impose tariffs will face legal obstacles. This systemic restriction would fundamentally change the logic of US trade policy formulation.

Forecast markets vs. traditional polls: the information advantage

Crypto forecast markets have demonstrated their value as information aggregation tools in this event. Compared to traditional polls or expert opinions, forecast markets have several unique advantages. First, the real-money incentive mechanism compels bettors to conduct in-depth research, whereas poll respondents have no economic motivation. Second, they update dynamically; odds in forecast markets adjust in real-time with new information, while polls often lag by days or weeks.

Although Polymarket and Kalshi show slightly different win probabilities (28% vs. 32%), both point to the same conclusion: Trump’s chance of winning is significantly below 50%. This cross-platform consistency enhances the credibility of the forecast. If two independent markets produce vastly different conclusions, it could indicate information asymmetry or market manipulation. But the current close predictions (only 4% difference) suggest a stable market consensus.

Another value of forecast markets lies in risk hedging. Importers, exporters, manufacturers relying on imported raw materials, and other economic agents face risks from tariff policy uncertainty. They can hedge by betting in forecast markets: if tariffs are maintained, costs rise but bets profit; if tariffs are canceled, costs fall but bets lose. This hedging mechanism makes forecast markets not just gambling tools but also risk management tools.

Friday’s ruling will be one of the most significant macro events early 2026. Regardless of the outcome, it will trigger chain reactions in stocks, forex, and commodities markets. The 28% win rate in the forecast market implies that a Trump loss is the baseline scenario, but there remains about a one-in-three chance of surprises. This uncertainty itself is a source of volatility, and investors should reduce risk exposure or establish hedges before Friday.