Daily Voice: What are the implications if Supreme Court rules against Trump's tariffs? This CEO explains

If US tariffs, particularly the broad "reciprocal tariffs" imposed under the International Emergency Economic Powers Act (IEEPA), are ruled illegal, the implications could be massive, impacting the economy, foreign policy, and the balance of power within the US government.

• Massive Refund Liability: The most immediate and logistically challenging implication would be the potential for the US government to owe billions of dollars (estimates range from nearly $100 billion up to over $1 trillion over a decade) in refunds to US importers who paid the tariffs.

• Consumer Benefit: The removal of these import duties would likely lead to lower prices on a wide range of imported consumer goods, as businesses would no longer have to pass the tariff costs onto customers.

• Market Stability: A clear ruling, one way or the other, could stabilize financial markets by ending the uncertainty that businesses and investors face when planning supply chains, pricing, and long-term investments.

• Shift in Trade Strategy: The removal of the tariffs would force a reset in trade dynamics, potentially leading to opportunities for more balanced deals for countries that were heavily impacted.

The US administration might attempt to repose similar tariffs using other statutory authorities.

In short, a ruling against the tariffs would be a seismic event—a major win for importers and congressional authority, but one that would create administrative and diplomatic turmoil in the short term.

Are you confident that India’s GDP and earnings growth numbers will continue to support the market and not disappoint investors, even if there is a delay in the India–US trade deal?

Historically, exports to the USA have not been a meaningful part of Indian economy. While a trade deal could significantly boost growth and job creation, the current implications of a delay do not substantially impact the Indian economy.

Our economy and markets will continue to lean on domestic consumption in the short run. The Indian Government's recent focus on consumption, through various fiscal and policy measures impacting direct and indirect taxes, interest rates, and liquidity, should hopefully restore the earnings growth trajectory.

What could be the major risk factors that might undermine market confidence?

The slowdown in the US economy, coupled with high inflation, may lead to a global recession. Moreover, a significant spike in global commodity prices could also be a key risk factor.

Would you advise accumulating IT stocks at this stage, given their reasonable valuations?

IT sector has witnessed slowdown in hiring given the uncertain outlook in US. Earnings momentum will be lower, and valuations are still around long-term averages.

For long-term investors, this sector offers value compared to many other areas of the market. However, investors need to keep in mind the impact of AI when evaluating companies in this sector, as the growth trajectory might be led by a different set of industry players than historically.

Do you believe the financial sector will remain a key driver of any market upside from here?

Financially, we would continue to see higher growth, led by lower transmission costs, higher economic growth and pockets of CAPEX. Valuations are also reasonable compared to many other sectors with similar growth.

Do you foresee any impact of the Bihar elections on the market?

We won't have any meaningful impact on the market unless elections result in a mandate that splits the ruling alliance in the central government.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.