Stocks to Watch as the Supreme Court Rescinds President Trump's Tariffs

Making financial headlines on Friday, the Supreme Court ruled 6–3 that President Trump exceeded his legal authority when he imposed sweeping global tariffs using the International Emergency Economic Powers Act (IEEPA) — a 1977 law intended for genuine national-security emergencies, not broad economic policy.

While markets will ultimately interpret the ruling over time, some of the potential positive effects include lower input costs for U.S. companies and, eventually, reduced trade uncertainty.

Of course, the potential negative or mixed effects may be short-term stock market volatility and sector-specific pressure on companies that benefited from tariff protection, such as certain steel or aluminum producers that could see downward pressure as foreign competition becomes cheaper.

Notably, the Supreme Court’s decision invalidates the tariffs imposed under IEEPA but does not resolve whether importers will receive refunds, a sum estimated at over $200 billion.

That said, here are a few stocks to watch on the positive beneficiary side of things that may be entitled to these rebates or will at least have better operating visibility going forward.

Apple & Amazon

Outside of semiconductors, which were mostly immune to higher tariffs, some notable tech stocks could benefit from the Supreme Court’s ruling, especially Apple AAPL and Amazon AMZN.

To reduce exposure to higher U.S. tariffs on China, Apple has undergone costly operational shifts to move some of its production to India and Vietnam, and has still paid an estimated $3 billion in tariffs under Trump’s trade policies.

Furthermore, the “de minimis exemption” is expected to go back in to affect, which allows low-value imports under $800 to enter the U.S. duty-free and would directly benefit Amazon’s e-commerce operations.  

Automakers

There is a caveat here, as General Motors GM has clearly faced more tariff costs than Ford F.

GM has faced a multi-billion-dollar per year tariff burden under Trump’s policies for a total sum that’s estimated at $6.1-$7.1 billion.

On the other hand, other domestic automakers, including Ford, have reportedly thanked Trump for foreign tariffs on medium-and heavy-duty trucks, which they believed benefited U.S. automakers.

Apparel Retailers

Apparel retailers such as Nike NKE and Lululemon LULU were pushed to shift or reconsider parts of their foreign production due to Trump-era tariffs and have also dealt with a significant supply-chain disruption because of such.

The reinstated "de minimis exemption” should help here as well, and as potential buy-the-dip targets, Nike stock is down 40% in the last two years, with Lululemon shares plunging nearly 60%.

Home Builders

Lower mortgage rates usually come to investors' minds first regarding a catalyst that can propel homebuilders, but higher material costs have weighed down their potential.

Lower import costs on certain essential construction materials could be very beneficial for homebuilder stocks like Toll Brothers TOL and Lennar Corporation LEN.

To that point, the Producer Price Index (PPI) for construction has been at an all-time high, which measures the average change in selling prices received by domestic producers for their construction output.

Bottom Line

Investors will certainly be monitoring the potential tariff relief impact on the global economy, and these stocks could be poised to benefit. On the flip side, many basic materials stocks have benefited from Trump's tariffs, like domestic steel and aluminum producers, and the president plans to seek other routes under the Trade Act to keep these policies in place, such as section 122.

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This article originally published on Zacks Investment Research (zacks.com).

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