Trump Tariff Regime Goes On Trial. Forecast as of 05.11.2025
Will the Supreme Court grant Donald Trump unlimited powers, or will it force him to return illegally collected revenues from tariffs? The future of the economy and the US dollar depends on the court’s verdict. Let’s discuss this topic and make a trading plan for the EUR/USD pair.
The article covers the following subjects:
Major Takeaways
- The Supreme Court will hear the case on tariffs.
- The prediction market believes Trump will lose.
- The US administration is considering a state of emergency.
- Long trades on the EURUSD pair can be opened if it pierces the 1.15 mark.
Weekly US Dollar Fundamental Forecast
“Literally, life or death for our country,” Donald Trump said about the upcoming Supreme Court’s verdict on the legality of tariffs. If the tariffs are canceled, according to the US leader, the US economy will “go to hell.” Indeed, the United States will have to return billions of dollars. This will widen the budget deficit and force Washington to follow London’s path. The pound is falling on the back of the BoE’s decision to raise taxes and cut spending. It seems that now is the right time to buy the EUR/USD pair.
US Import Duty Revenues
Source: Bloomberg.
Notably, the legality of import duties is key. Donald Trump cited an emergency when imposing tariffs. However, lower courts and the Senate argue that the US is not facing such a situation.
The White House, however, disagrees. Scott Bessent refers to the concept of a turning point in the economy. China’s restrictions on the export of rare earth minerals, coupled with a significant trade imbalance, are evidence of an emergency. Had the US administration taken action instead of adopting a passive stance, the global financial crisis of 2008–2009 could have been avoided.
However, investors are sceptical about the US administration’s position. Polymarket and PredictIt decision markets give more than a 60% probability that Donald Trump will lose in court.
Chances of US President Losing in Court
Source: Bloomberg.
America’s trading partners will benefit twice over. They will not only get their money back, but lower import duties will also have a positive impact on international trade, boosting the currencies of exporting countries and regions. The euro will reap the greatest benefits, as exports account for over 40% of Germany’s GDP. This compares with just over 10% for the United States.
However, the problem is that the Supreme Court has only just begun its hearings. It will take several weeks, possibly months, to reach a verdict. Meanwhile, fears of impending chaos due to the cancellation of tariffs may affect global risk appetite, trigger a correction in the US stock market, and strengthen the US dollar as a safe-haven currency.
Another issue is that the record-long shutdown, which has supported the greenback, is about to end. Rumours of progress in negotiations between the Democrats and the Republicans have increased the likelihood of a December Fed rate cut from 67% to 74%, while also pushing Treasury yields down. Had it not been for the S&P 500’s decline, the EUR/USD rate would have strengthened.
Given the Supreme Court’s consideration of the tariff case, markets may face a period of extreme volatility. If tariffs are ultimately abolished, the major currency pair will resume its upward trend. However, investors have to be patient.
Weekly EURUSD Trading Plan
Against this backdrop, if EUR/USD bears fail to keep the price below 1.15, it will signal their weakness and offer a solid opportunity to buy the euro.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of EURUSD in real time mode
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