Trump's "I will deal with the courts"

Why it's important: The U.S. Supreme Court ruled 6-3 that President Trump's tariffs under IEEPA (International Emergency Economic Powers Act) were unconstitutional, overturning a tariff regime exceeding $134 billion. Trump stated, "We have to deal with the courts," openly attacking two justices he himself appointed. As the foundation of the separation of powers is shaken, markets reacted violently with a weaker dollar, a temporary BTC surge, and higher stocks, entering a phase where trust in the "rule of law" is tested.

📝 Summary: The U.S. Supreme Court ruled 6-3 that President Trump's tariffs under IEEPA (International Emergency Economic Powers Act) were unconstitutional, overturning a tariff regime exceeding $134 billion.

What Happened

• Supreme Court Ruling — On February 20, 2026, the U.S. Supreme Court issued a 6-3 decision in Learning Resources, Inc. v. Trump, ruling that President Trump's tariffs imposed under IEEPA (International Emergency Economic Powers Act) were unconstitutional. Chief Justice Roberts authored the majority opinion, joined by Justices Gorsuch and Barrett, both appointed by Trump. The Court held that tariff authority belongs to Congress under Article I of the Constitution, and IEEPA does not provide a basis for tariffs.
• Trump's Counter-Stance — Immediately after the ruling, Trump, receiving a memo during a meeting with state governors at the White House, called it a "disgrace" and stated, "We have to deal with the courts." In a press conference, he attacked the justices as "unpatriotic and disloyal to the Constitution," and declared Gorsuch and Barrett to be "a disgrace to their families." He immediately signed an executive order imposing a 10% global uniform tariff under Section 122 of the Trade Act, instead of IEEPA, announcing it would take effect on February 24.
• Market Reaction — The S&P500 rose +0.69% and Nasdaq +0.9%. BTC temporarily surged above $68,000 but returned to around $67,000 due to profit-taking. The dollar fell, and gold remained firm. The market digested the ruling itself as "expected," but Trump's judicial attack remarks and the legal sustainability of the alternative tariffs emerged as new uncertainty factors.

Overall Picture

Historical Context

The clash between the President and the Supreme Court is the most dramatic testing ground for the separation of powers designed by the U.S. Constitution. Historically, three precedents structurally resonate with the current situation.

In 1832, President Andrew Jackson is said to have told Supreme Court Justice Marshall, regarding the Worcester v. Georgia case concerning Native American rights, "John Marshall has made his decision; now let him enforce it" (though the authenticity of this quote is debated). Jackson effectively ignored the ruling. Notably, Vice President J.D. Vance quoted Jackson's words in a 2021 podcast, suggesting Trump should "stand like Jackson before the people."

In 1937, Franklin D. Roosevelt (FDR), facing repeated Supreme Court rulings against his New Deal policies, proposed a "court-packing bill" to add six justices. Public support remained at 39%, and the bill was defeated in Congress. However, the pressure proved effective, and the Supreme Court subsequently shifted to support New Deal legislation (the "switch in time that saved nine"). FDR ultimately appointed eight justices during his tenure, changing the direction of the judiciary.

In 1974, President Richard Nixon complied within eight hours with a unanimous Supreme Court ruling ordering him to submit Watergate tapes. He resigned 16 days later. It was a moment that affirmed the principle that "no one, not even the President, is above the law."

What is unique about the current ruling is that Trump was repudiated by two conservative justices he himself appointed (Gorsuch and Barrett). This is proof that judicial independence is functioning, but it also carries the risk of further escalation of the conflict as the President perceives himself as "betrayed." A CNN reporter stated that Trump privately raged, calling it "this damn court." In the history of the separation of powers, a president publicly calling Supreme Court justices "a disgrace to their families" is unprecedented.

Stakeholder Map

Structure Seen in Data

• 6-3 — The Supreme Court's vote count. Three conservative justices (Roberts, Gorsuch, Barrett) joined the three liberal justices, with two Trump-appointed justices siding with the majority.
• $134 billion — Total tariffs collected under IEEPA tariffs by December 2025. Over 301,000 importers paid these, with the burden ultimately passed on to consumers.
• $1.5 trillion — Estimated revenue over 10 years if tariffs were maintained. This funding source has disappeared due to the ruling, raising concerns about its impact on the fiscal deficit.
• 10% — The alternative tariff rate immediately imposed by Trump under Section 122 of the Trade Act. However, this law provides for a temporary measure of up to 150 days, and an extension requires congressional approval.
• +0.69% — The S&P500's rise on the day of the ruling. The market reacted positively to the tariff removal, but the limited increase suggests the ruling was "priced in."
• $68,000 → $67,000 — BTC's price movement after the ruling. It temporarily rose 2% but returned due to profit-taking, showing no consistent reaction as "digital gold."
• 150 days — The maximum duration of tariffs under Section 122 of the Trade Act. It will expire in late July 2026, and if Congress does not extend it, the alternative tariffs will also disappear.

Reading Between the Lines — What the News Isn't Saying

While President Trump outwardly advocates for correcting the trade deficit, his true intention is to maximize presidential power through tariffs and appeal to his support base. The Supreme Court seeks to protect judicial independence, but faces the risk of public trust being shaken by presidential attacks. Congressional Republicans want to avoid internal party division, but the conflict between Trump supporters and free trade advocates is deepening, leaving them in a bind.

NOW PATTERN

Imperial Overreach × Institutional Decay

Imperial Overreach × Institutional Decay

Trump's judicial attacks against the Supreme Court's unconstitutional tariff ruling made visible the institutional friction of the separation of powers, revealing a structure where policy uncertainty itself is becoming institutionalized as America's new "normal."

Imperial Overreach: "Betrayed by the Justices I Appointed" — Unprecedented Presidential Attack on the Judiciary

President Trump openly attacked Supreme Court justices he himself appointed as "a disgrace to their families." In the history of the separation of powers, there is no precedent for a sitting president personally attacking justices he appointed.

The Supreme Court's ruling on February 20, 2026, in Learning Resources, Inc. v. Trump, was not merely a trade law precedent, but an event that challenged the very governance structure of the United States.

First, let's clarify the legal framework of the ruling. Chief Justice Roberts applied the "major questions doctrine," holding that IEEPA (International Emergency Economic Powers Act) does not provide a basis for tariffs. This doctrine states that "if Congress wishes to assign an agency decisions of vast economic and political significance, it must do so clearly," and IEEPA has historically been used for asset freezes and sanctions, not for indefinite tariffs.

Justice Gorsuch's concurring opinion delved into deeper principles. He stated that "the legislative process ensures that each of us has a stake in the laws by which we are governed," emphasizing the importance of congressional legislation. Justice Barrett also clearly concluded that "the most natural reading of IEEPA does not grant the President the power to impose tariffs."

However, even more shocking than the legal content of the ruling was Trump's reaction. In a press conference, he denounced all six majority justices as a "national disgrace," "unpatriotic and disloyal to the Constitution," and personally attacked Gorsuch and Barrett as "a disgrace to their families." He further questioned the justices' motives, stating they were "influenced by foreign interests and political forces," without providing specific evidence.

The unusual nature of this attack stands out in historical comparison. FDR clashed with the Supreme Court but did not attack individual justices; he sought to counter through institutional means (court packing). Nixon reluctantly complied with the ruling. Trump's method is a "dual strategy of compliance and attack," where he formally complies with the ruling but undermines its authority by attacking the judiciary's legitimacy itself.

Notably, Justice Kavanaugh's 63-page dissenting opinion argued that tariffs are a "traditional and common means of regulating imports," and IEEPA permits them. He further contended that the "major questions doctrine should not apply to foreign affairs cases." However, Kavanaugh also added that "this ruling may not substantially constrain future presidents' ability to impose tariffs," suggesting room for tariffs under other legal bases (e.g., Section 301, Section 232 of the Trade Act). This observation ironically aligns with Trump's immediate action to impose alternative tariffs under Section 122 of the Trade Act.

Institutional Decay: The 150-Day Time Bomb — How "Uncertainty" Becomes America's New Normal

The ruling declared the tariffs "unconstitutional," but it did not end trade policy uncertainty. Rather, uncertainty has become institutionalized, establishing a structure where a crisis will recur in 150 days.

Immediately after the Supreme Court ruling, Trump signed an executive order imposing a 10% global uniform tariff under Section 122 of the Trade Act. While this alternative measure is legally valid, it contains three structural constraints.

First, Section 122 allows for a "temporary import surcharge" of up to 150 days to address "large and serious balance-of-payments deficits," but an extension requires congressional approval. This means a "time bomb" is set to expire in late July 2026. Congressional Republicans are divided between Trump supporters and free trade advocates, making the success of an extension bill highly uncertain.

Second, Section 122 prohibits country-specific discriminatory tariffs. Trump's IEEPA tariffs had country-specific rates, such as 34% on China and 25% on Canada and Mexico, but Section 122 only allows a uniform 10%. The political centerpiece of "punitive" high tariffs on China has been lost. However, country-specific responses can still be pursued through existing Section 301 tariffs (7.5-25% on approximately $370 billion worth of Chinese imports, currently in effect) and Section 232 tariffs (50% on steel and aluminum), meaning there will not be a complete tariff removal.

Third, the issue of refunding the $134 billion in already collected tariffs arises. Since the Supreme Court ruled them "unconstitutional," importers may file lawsuits seeking refunds. If a full refund is ordered, the fiscal deficit would rapidly expand. With the disappearance of tariff revenues originally projected at $1.5 trillion (over 10 years), the financial structure of the Republican-backed tax cut bill would also fundamentally collapse.

This "institutionalization of uncertainty" creates unique dynamics in financial markets. The S&P500 rose +0.69% on the day of the ruling, but this was merely the digestion of short-term positive news ("tariff removal = reduced corporate costs"). As Matthew Sigel of VanEck points out, "the disappearance of tariff revenue could accelerate money printing and currency depreciation to cover the fiscal deficit." In this context, BTC and gold could see demand as a "hedge against currency depreciation," but BTC's movement immediately after the ruling (temporarily above $68,000, then returning to $67,000) indicates that the market has not yet fully priced in this structure.

The true uncertainty lies in congressional action leading up to the 150-day expiration. Republican Senator Rand Paul welcomed the ruling, stating "tariff authority rests with Congress," while Representative Buddy Carter opposed it as "judicial overreach." Senator McConnell articulated a principled stance that "Congress's role in trade policy is not an inconvenience to be avoided." This internal party division is unlikely to be resolved within 150 days.

Intersection of Dynamics

"Imperial Overreach" and "Institutional Decay" form a vicious cycle. The more the Supreme Court limits presidential power, the more Trump attacks the judiciary and attempts to continue tariffs through alternative means. Since alternative measures (Section 122) are temporary, new political risks arise every 150 days through negotiations with Congress. Because Congress is divided, the long-term direction of trade policy remains unsettled, and uncertainty becomes "the new normal." This structural uncertainty gradually erodes confidence in the dollar. For financial markets, this is no longer a simple binary choice of "tariffs or no tariffs," but has transformed into a fundamental question of "trust in the U.S. governance system." The simultaneous reaction of BTC and gold may be a sign that markets have begun to perceive "anxiety about U.S. institutional stability" rather than merely "dollar depreciation." If this dynamic persists, diversification away from dollar assets could become a structural trend, accelerating the shift of funds to crypto assets, gold, and non-dollar assets.

Pattern History

1937: FDR's Court-Packing Plan and the "Switch in Time That Saved Nine"

In February 1937, Franklin D. Roosevelt, in response to the Supreme Court's repeated rulings against his New Deal policies, proposed a bill that would allow him to appoint a new justice for every justice over 70 years old. The plan was to expand the Supreme Court to 15 justices by adding up to six new members. Public support remained at 39%, and opposition erupted even from his own Democratic Party in Congress. The plan effectively failed in July 1937. However, this pressure proved effective, leading to the "switch in time that saved nine," where conservative Justice Owen Roberts shifted to support the New Deal. FDR ultimately appointed a total of eight justices during his tenure, long-term changing the direction of the judiciary. This was an example where a combination of institutional counter-measures (the court-packing bill) and political pressure achieved results while avoiding direct confrontation.

Structural similarities to the present: While FDR countered "within the system," Trump is countering "on the periphery of the system" through personal attacks on individual justices and the immediate activation of alternative legal grounds. Both cases share the structure of presidential backlash against Supreme Court intervention in economic policy, but the nature of their counter-measures is fundamentally different. FDR's pressure functioned as a "deterrent" and elicited a change in the Supreme Court's stance, whereas Trump's attacks carry the risk of undermining the very legitimacy of the judiciary.

1974: United States v. Nixon — The Day "No One Is Above the Law" Was Affirmed

On July 24, 1974, the Supreme Court unanimously (8-0, Justice Rehnquist recused) ordered President Nixon, who had refused to submit Watergate tapes, to do so. It was symbolic that Chief Justice Burger, appointed by Nixon himself, authored the majority opinion. The Court ruled that executive privilege is not "absolute" and is subordinate to the need for evidence in criminal prosecutions. Nixon agreed to submit the tapes within eight hours of the ruling and resigned 16 days later. This case became a landmark precedent establishing the principle that "no one, not even the President, is above the law." Compliance with the ruling was swift, and an institutional crisis was averted.

Structural similarities to the present: Both Nixon and Trump were repudiated by justices they themselves appointed. Chief Justice Burger in the Nixon case structurally corresponds to Justices Gorsuch and Barrett in the current case. The crucial difference lies in the reaction. Nixon, despite his dissatisfaction, complied within eight hours, maintaining institutional order. Trump, while formally complying with the ruling (by imposing alternative tariffs), adopted a "dual strategy of compliance and attack" by openly attacking the justices to erode judicial authority. This strategy may maintain political cohesion in the short term but erodes trust in institutions in the long term.

Patterns Revealed by History

The clash between the President and the Supreme Court is a structural pattern that has recurred throughout American history. FDR (1937) achieved a long-term victory through institutional counter-measures, and Nixon (1974) preserved the system by complying with the ruling. Trump (2026) represents a third type, combining formal compliance with personal attacks. History teaches that these types of conflicts create short-term crises but are ultimately resolved through congressional legislative action. In this case, too, the key lies in whether Congress can legislate tariff authority.

Future Scenarios

Optimistic Scenario (Probability: 20%)

Congress agrees on a bipartisan basis to legislate tariff authority, stabilizing the legal foundation of trade policy. Long-term trade legislation is enacted before the 150-day deadline. Trump's judicial attacks remain rhetorical, and institutional conflict is avoided. Dollar depreciation pressure eases, and market risk-on sentiment recovers. Both BTC and S&P500 rise.

Investment/Action Implications: If legal stability of policy is confirmed, a return to risk assets is rational. Gradual accumulation of BTC and tech stocks would be effective. However, congressional agreement is difficult given the divisions within the Republican Party.

Base Scenario (Probability: 50%)

The 10% uniform tariff under Section 122 continues for 150 days, but extension talks in Congress face difficulties. Due to divisions within the Republican Party, clear legislation is not achieved, and market uncertainty re-escalates as the 150-day deadline approaches. Trump continues to attack the judiciary but does not proceed with specific institutional changes (e.g., court packing). The dollar gradually depreciates, and gold remains firm. BTC trades directionless in the $60,000-$80,000 range.

Investment/Action Implications: Portfolio construction based on prolonged uncertainty is crucial. Dollar-denominated asset concentration should be corrected, and diversification into gold, BTC, and non-dollar assets should be gradually pursued. Consider hedging against increased volatility around the July expiration.

Pessimistic Scenario (Probability: 30%)

Trump effectively ignores the Supreme Court ruling by imposing new IEEPA tariffs under the guise of another "emergency," escalating into a full-blown constitutional crisis. Congressional Republicans split, and discussions of impeachment or judicial impeachment emerge. Markets lose confidence in U.S. institutional stability, leading to simultaneous sell-offs of the dollar and U.S. Treasuries. BTC and gold could surge as a "flight from the dollar" safe haven, but in a full-scale risk-off environment, crypto assets could also be dragged down.

Investment/Action Implications: In the worst-case scenario, prioritizing a flight to highly liquid safe assets (gold, short-term U.S. Treasuries) is paramount. BTC presents both the possibility of being a "dollar distrust hedge" and being "sold off as a risk asset," so position sizing should be small.

Key Triggers to Watch

• Expiration of 150-day Section 122 tariffs: Late July 2026
• Congressional movement on tariff legislation (Republican internal support/opposition): March-July 2026
• Trump's additional attacks on the judiciary or hints at institutional changes: Immediately ~ H1 2026
• Developments in lawsuits for the return of $134 billion in collected IEEPA tariffs: Q2 2026 onwards
• Fed's monetary policy decisions (will rate cuts accelerate dollar depreciation?): March, May 2026 FOMC

Tracking Points

Next Trigger: The outcome of the 2024 U.S. presidential election and the direction of the next administration's trade policy (January 2025).

Continuation of this pattern: Changes in market confidence in U.S. institutional stability and accelerated capital shift to crypto assets and gold.

Sources:

• WatcherGuru (Original Tweet)
• CNBC - Supreme Court strikes down Trump tariffs
• NPR - Supreme Court strikes down Trump's tariffs
• SCOTUSblog - Supreme Court strikes down tariffs
• NBC News - Trump calls justices 'disloyal'