Traders on Kalshi and Polymarket are losing confidence in Trump’s tariff powers as the Supreme Court shows doubt over his authority.
Prediction markets are showing a change in how traders view President Donald Trump’s tariff authority.
Both Kalshi and Polymarket are showing declining confidence that the Supreme Court will back Trump’s claim to impose tariffs under emergency powers.
Kalshi and Polymarket traders see shrinking odds for Trump
Kalshi showed on Thursday that traders now assign just a 29% chance that the Supreme Court will rule in favour of Trump. That figure dropped 28 points in one day.
Polymarket, which runs on blockchain and settles contracts in USDC posted similar results.
The platform’s odds fell to 25%, which means that traders expect the court to restrict Trump’s ability to impose tariffs without approval from Congress.
Supreme Court Shows Doubts About Trump’s Tariff Powers
The sell-off in tariff-related contracts came after Supreme Court justices raised doubts about Trump’s use of emergency powers. Several conservative members of the court joined liberal colleagues in questioning whether the president can impose such heavy tariffs.
During oral arguments, Chief Justice John Roberts pointed out that tariffs are like taxes, because they have historically fallen under Congress’s control.
Justice Amy Coney Barrett questioned why Trump’s tariffs targeted countries like Spain and France. Justice Neil Gorsuch warned that granting the executive branch too much authority could create a “one-way ratchet” toward unchecked presidential power.
The case is centred on Trump’s use of the 1977 International Emergency Economic Powers Act. The law allows presidents to act swiftly during national emergencies but critics argue that Trump’s use of these powers went beyond what Congress intended.
Lower courts have already ruled that Trump overstepped his authority.
They found that his reciprocal and fentanyl-related tariffs lacked legal grounding. Now, the Supreme Court must decide whether to uphold those rulings or restore Trump’s powers.
Prediction markets mirror changing trader sentiment
Traders on both Kalshi and Polymarket adjusted their positions almost immediately after the hearing. Kalshi’s contracts tied to a pro-Trump ruling dropped from nearly 50% earlier in the week to around 30% after arguments ended.
Polymarket saw a similar reaction with odds sliding from over 40% to about 25%. The parallel movement across these platforms indicates that both traditional and crypto-native traders see court signals in similar ways.
Wider trade and market reactions
Trump’s tariffs have long affected both traditional and crypto markets. Earlier trade tensions under his administration created inflation worries and led some investors to buy Bitcoin as a hedge.
However, these same tariffs also caused uncertainty that tends to push nvestors toward safer assets like bonds or the US dollar.
While the current case is focused on legal authority, it could affect the financial markets if it limits how presidents handle trade disputes.
In other words, if the Supreme Court rules against Trump, future administrations might face tougher boundaries when trying to use emergency powers.
The Supreme Court has not yet announced when it will issue its ruling. Until then, traders are expected to keep adjusting their bets as new commentary turns up.
For now, prediction markets continue to provide a live window into how investors think the court will rule.