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What If It's All Undone?
Despite all the bluster, tariffs, trade deals, and company investments may be overthrown by courts.
Travis Hoium
September 01, 2025
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I hesitate to wade into these waters again, but I think we have to, given how important the news was late last week.
On Friday, after the market closed, an appeals court ruled that most of President Trump’s tariffs are illegal.
I don’t find this particularly shocking. The President does not — at least according to the Constitution — have the right to set tax rates, tariff rates, or even sign trade deals just because he/she wants to. Congress has ceded rights to the president over the last century, but enacting global tariffs on a whim and asking countries to negotiate with him personally is a bridge too far. And the courts agree…for now.
This is important for markets for several reasons:
Markets hate uncertainty.
A final ruling isn’t likely until sometime in 2026 if/when the Supreme Court weighs in.
Tariffs have been a drag on business and are now even more up in the air.
I’m not sure how you plan for the next 6-12 months if you don’t know what tariffs will be in place.
The uncertainty and reaction from the White House could throw bond markets into chaos, raising borrowing rates for the U.S., consumers, and companies.
Without tariff revenue, the growing deficit would be even worse, and it’s possible tariffs paid by companies would need to be returned (I’m speculating here).
None of this is good for stock values or business investment. The U.S. has been the best place to invest for over a century because it’s stable. The rules of the “game” are predictable, whether you’re investing or building a business.
The same can’t be said about South America, China, or Africa.
We have a comparative advantage. Stability is how we win, and stability seems to be crumbling piece by piece.
More on that in a moment.
The market took a bit of a breather this week. The Nasdaq 100 was down slightly, which is only notable because NVIDIA reported earnings, and there wasn’t much of a reaction. It makes you wonder if investors have figured out NVIDIA at this point, and we may not see huge earnings beats again in the near future.
The Asymmetric Portfolio has slipped slightly over the last few weeks, but the interesting trend is that the value stocks I’ve been buying for a year are coming to life. Alphabet $GOOG ( ▲ 0.55% ) is up 23.8% in three months, MGM Resorts $MGM ( ▲ 0.25% ) is up 23.8%, and Lyft $LYFT ( ▲ 0.53% ) has popped 15.7% in the past month. Meanwhile, the rocket stocks of April to July have started to fall back to earth.
In Case You Missed It
Here’s some of the content I put out this week.
The Aggregation Flywheel: I explain why companies that can aggregate demand can have both more subscribers and more revenue per subscriber, which is a flywheel that feeds on itself.
Google and the Narrative Shift: Google is finally back in favor, and that should lead to a much higher stock price.
10 Stocks That Could Crash Soon: If the AI bubble bursts, these stocks will crash.
What If It’s All Undone?
The last eight months on Wall Street have been dominated by the Trump Administration. Like it or not, that’s the reality.
Tariffs crashed the market in early April.
The delay of tariffs later that month caused a surge in stock prices.
Each “deal” seems to be cheered by investors.
We had all seemed to come to a kind of understanding. President Trump could talk big about tariffs, countries would offer some meaningless concession, companies like Apple would be exempted, and the TACO trade would continue.
Friday threw that balance into turmoil.
A federal appeals court ruled most of President Trump’s tariffs illegal. From the BBC:
A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president.
The so-called reciprocal tariffs - imposed on nearly every country the US trades with - are being illegally imposed, the US Court of Appeals said on Friday.
The decision upholds a ruling in May from the Court of International Trade, which also rejected Trump's argument that his global tariffs were permitted under an emergency economic powers act.
Many of the tariffs that would be affected by the ruling stem from an announcement in April of a flat 10% rate on imports from all countries, which Trump said would even out "unfair" trade relations with the US.
The court did not halt the tariffs but instead said they would remain in place until mid-October, setting up a further legal challenge in the US Supreme Court.
This throws everything into chaos.
Should companies assume tariffs are still going to be in place or not?
Will tariffs be refunded if they’re overturned?
Should production be moved to the U.S. or another country based on tariff rates?
At the end of the day, the business world is likely frozen.
And why would anyone negotiate on tariffs now? Japan reportedly backed out of talks last week. China has been kicking the can for months.
No deal that’s been announced has been approved by Congress, so are they illegal, too?
Kissing the Ring and Ignoring His Rules
The reaction to deals with companies has been amusing.
NVIDIA CEO Jensen Huang has been a regular at the White House, happy to give President Trump a photo op with one of the richest, most powerful people in the world.
He even made a “deal” to give the U.S. government 15% of sales to China in exchange for the ability to sell H20 chips, with the next step being Blackwell sales to China.
The only problem is, a deal with Trump personally isn’t a law or regulation a company can/will follow. And NVIDIA’s CFO said as much.
USG officials have expressed an expectation that the USG will receive 15% of the revenue generated from licensed H20 sales, but to date, the USG has not published a regulation codifying such requirement.
Why negotiate on anything if the punishment being levied isn’t enforceable?
Intel’s Deal and U.S. Investments in Companies
And then there’s the idea of investing in more U.S. companies. Intel has agreed to give the U.S. a ~10% stake, which isn’t really a new investment but rather a conversion of CHIPS Act funds into equity. But Commerce Secretary Howard Lutnick said last week the U.S. could invest in more companies like defense contractors.
Would that be legal?
Probably not. Maybe?
What If It’s All Undone?
So, I come back to my original question: What if it’s all undone?
What if tariffs are illegal?
What if trade deals are never completed?
What if the equity stake in Intel falls apart?
What if all of these press conferences are for nothing?
I’m not sure if it’s good or bad. But it’s not the stable environment investors and entrepreneurs have come to enjoy in the U.S., and breaking that trust with the drivers of economic activity is a great way to reduce the U.S. stock market premium.
And that would be bad for all of us.
Disclaimer: Asymmetric Investing provides analysis and research but DOES NOT provide individual financial advice. Travis Hoium may have a position in some of the stocks mentioned. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor, or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please do your research before acquiring stocks.
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