Trump Tariff Takedown Threat: 2 Stocks Facing Supreme Court Doom

"These included a 10% baseline duty on imports from nearly all countries effective Apr. 5, with higher reciprocal rates on dozens of trading partners starting Apr. 9. While he paused some of the higher rates before they kicked in, the damage was done: the S&P 500 plunged nearly 5% in a single day and lost trillions in market value over the following sessions - the worst stretch since the 2020 pandemic crash."

"Although stocks later rebounded sharply, uncertainty lingers over the tariffs' legal foundation under the International Emergency Economic Powers Act. The Supreme Court, which heard arguments in November, could issue its ruling on their constitutionality as soon as tomorrow. If they are struck down, the duties would end and U.S. producers would be exposed to foreign competition. Domestic manufacturers like Caterpillar ( ) and General Motors ( ) stand to suffer the most from lost protection if the tariffs are ruled unconstitutional."

"Caterpillar shares rose 58% over the past year, fueled by tariffs that curb cheap Chinese imports and boost domestic demand. The company, a top producer of construction and mining equipment, gained from expanded Section 232 tariffs on steel and aluminum, which doubled to 50% by June and extended to machinery components. This limited competition from Chinese firms like Sany allowed Caterpillar to hold market share in earthmoving gear."

Last April, sweeping tariffs were announced, including a 10% baseline duty on most imports effective Apr. 5 and higher reciprocal rates on many trading partners beginning Apr. 9, with some higher rates paused before implementation. The S&P 500 plunged nearly 5% in one day and lost trillions in market value over subsequent sessions. Legal questions under the International Emergency Economic Powers Act remain, and the Supreme Court may rule on constitutionality imminently. If the tariffs are struck down, duties would end and U.S. producers such as Caterpillar and General Motors would face increased foreign competition and reduced protection.

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