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The diggers have already demolished parts of the White House’s East Wing to create Donald Trump’s new ballroom. Could the Supreme Court do the same for his tariffs? Betting markets think he’ll lose the latest court battle. How would he get out of that hole? James Smith has brought a new tin hat…

Rising from the rubble
 

It was Fireworks' Night here in Britain this week, but an even more explosive moment could be about to happen in Washington. Last year, 5 November brought us a fiery Presidential election. This year, it marks the start of a Supreme Court battle which threatens to demolish his tariff policy.

Sounds far-fetched? So did thoughts about the remodelling of the White House a year ago, so think on. The Supreme Court may have a 6-3 majority of Conservative judges, and three that were appointed by the current President himself. But the tone from many of them this week sounded sceptical. The ever-growing betting markets increasingly think Trump will lose; the latest pricing has a 72% chance of the justices upholding the lower courts' verdict that the White House’s use of emergency powers for tariffs was illegal. Our team has a nice explainer on the whole thing here.

Betting markets think President Trump will lose his tariff court battle
 

Source: Macrobond

That raises some interesting questions.

Firstly, what happens to all the revenue raised so far? Er, well, maybe this is a good time to remember the tariffs haven’t actually raised as much as they were meant to.

The chart below shows that receipts are averaging 10% of recent imports, below the 16.6% we calculate they should be yielding based on what the US imported in 2024. About two-thirds of that is meant to come from tariffs wielded under emergency powers (or the IEEPA in legal-speak). That’s everything not confined to a specific sector – and it’s those tariffs that are under threat from the Supreme Court.

So far, those tariffs have raised $88bn – or about 0.3% of US GDP. A ruling against the IEEPA tariffs would likely mean they would get refunded. If that sounds like it might be a surprise boost to GDP, then remember any rebates will presumably be slow and patchy.

But what matters much more is the impact on America’s fiscal trajectory. As James Knightley discusses in his monthly article, tariffs were supposed to raise $2.5tn over the next decade.

Tariffs aren't yielding what they were expected to
 

Average tariff rate calculated by Yale, except the latest datapoint which is an ING estimate
Source: Macrobond, ING
 

Secondly, what would it all mean for the US macro story? Lower tariffs should mean lower inflation, though the fact that the tariffs haven’t yielded as much as predicted means goods price pressure hasn’t risen nearly as much as expected so far anyway. Car prices are a particular surprise, given there's been no discernible increase despite chunky tariffs on the sector. And as James K says, the disinflationary impulses in the much more significant service sector are a bigger force than tariffs.

Of course, there’s a much more basic problem for the Fed right now – and that’s a lack of data. Next week’s inflation figures won’t be coming out as scheduled. Which raises an interesting proposition: what happens if we don’t get any new numbers before the December Fed meeting?

Chair Powell is far from sold on the need for another cut this year. But we still think it’s more likely than not, a call that’s been helped by this week’s jobs figures.

Worryingly, the Challenger layoff report showed the most firings in a given month outside of government since the pandemic. Some – though certainly not all – of that can be traced to recent announcements by UPS and Amazon.

Our long-held concern has been that the US jobs market is at risk of moving from “low hire, no fire” to “no hire, let’s fire”. And at face value, the unofficial data we’re getting suggests that remains a valid risk. It’s why, in our latest ING Monthly, we reiterated our call for another Fed cut by year-end – and two more next year.

Job cut announcements spiked in October
 

Source: Macrobond, ING
 

Onto the final question, which is: what happens to trade flows if those tariffs get ruled illegal?

It brings me back to perhaps the most iconic chart of 2025, courtesy of my Hong Kong-based colleague Lynn Song. China’s exports to the US are down almost 20% in the first ten months of the year, relative to the same period last year. That’s been completely offset by export growth elsewhere, notwithstanding the slight dip we saw in October.

That includes the EU, where fierce price competition from China is a growing issue for European industry – something my colleagues Bert and Carsten wrote about in detail this week.

Put simply, Lynn argues that China’s fastest-growing export sectors have limited exposure to American demand. The country is on track for its 5% growth target.

Still, if the Supreme Court rules against Trump, then it’s not inconceivable that we’ll get another short-lived bounce in exports to the US. True, the White House has various alternative means of reimposing tariffs, including Section 122, which permits 15% tariffs for 150 days. A broadening of sectoral tariffs is another option. But the timing is key; Section 232, which brought us tariffs on metals and cars, requires lengthy investigations. And that would potentially provide a tempting window for US importers to stock up again.

Here's the bigger point, though: As the sparks fly in the Supreme Court, a ruling against the President will simply ignite a new phase in US trade policy - one that reshapes tariffs rather than extinguishes them.

China's exports have been resilient despite US weakness
 

Source: Macrobond, ING

THINK Ahead in developed markets
 

United States (James Knightley)

In theory, it should be another key week for data, with the likes of CPI and retail sales scheduled, but the ongoing government shutdown means no work has been done to collect, collate, and calculate the outcomes. As such, we are reliant on third-party surveys, such as the NFIB Small Business Optimism Index, which is expected to remain little changed. However, we will also be following the federal budget statement, which is still expected to be published. The interesting aspect is to see how much money the shutdown is saving the government. Typically, the government borrows heavily in October ($257bn in 2024, $67bn in 2023 and $88bn in 2022), but with wages not being paid, we could see a surplus. When the shutdown ends, back pay will mean a much larger deficit in that specific month.

United Kingdom (James Smith)

• Jobs data (Tues): The Bank of England, though deeply divided, appears on course to cut rates in December, barring any big surprises either the data or the late-November budget. On the former, we're likely to see private-sector wage growth edge down, keeping it on track to end the year below 4%. That's a key reason behind our call for a total of three more cuts from the BoE.
• 3Q GDP (Thurs): The UK is on course for modest 0.2% growth through the third quarter, after a stronger first half that was buoyed by tariff frontloading. The monthly GDP data has been volatile, though in general we expect growth to be a little slower through 2026 as support from the government fades.

Key events next week in developed markets
 

Source: Refinitiv, ING

THINK Ahead in Central and Eastern Europe
 

Poland (Adam Antoniak)

• 3Q25 flash GDP (Thu): We estimate a solid GDP growth in 3Q25, partially on the back of a low reference base from 3Q24, when south-western Poland suffered from a flood and activity in some sectors was subdued. This year, retail sales data suggest robust activity in trade and activity in manufacturing strengthened somewhat as compared with 2Q25. Construction remained in recession. Private consumption was again the main driver of economic growth, while fixed investment most likely continued underperforming. Consumers benefit from a robust increase in real disposable income in 2024 and still solid growth of wages this year, while investment activity is curbed by delays in RRF projects implementation and elevated uncertainty due to geopolitical factors (war in Ukraine, U.S. trade policy). Details of GDP composition will be published on December 1. In 2025, as a whole, we still see economic growth at 3.5%.
• Sep balance of payments (Thu): Already relatively low external imbalance seems to be stabilising in recent months. We forecast that the current account deficit amounted to €488mn in September, and the 12-month rolling imbalance moderated to -0.9% of GDP from -1.0% of GDP after August. According to our estimates, exports of goods in € increased by 5.7%YoY, while imports rose by 4.1%YoY amid some military equipment arrivals.
• October CPI (Fri): Flash estimate of October CPI inflation at 2.8%YoY should be confirmed by the final data. Detailed CPI composition should give us some insight into the sources of the estimated decline in core inflation that was the main source of downward surprise in the October price report. Inflation continues declining and should hover around the National Bank of Poland (NBP) target of 2.5% in the final months of this year.

Hungary (Peter Virovacz)

• Inflation (Tue): We don’t expect the October print in Hungary to significantly change the inflation big picture. While the monthly repricing will remain limited, the year-on-year figure is expected to remain above the central bank’s tolerance band. Underlying price pressures still do not favour a change in monetary policy, as we see core inflation moving above 4% again. The risk is rather skewed to the downside, mostly because global food price pressure is abating and the HUF is still strong.

Czech Republic (David Havrlant)

• The economy is on track with its solid rebound, and we expect that the unemployment rate has likely remained stable in October. The layoffs in the industry continued, albeit at a less pronounced rate, while the booming construction and service sectors are hiring. Inflation for October is set to be confirmed by the statistical office, while we expect the detailed breakdown to show a bounce back in food prices and perhaps a marginally stronger core inflation. The current account balance is likely to have improved slightly in September.

Key events next week in Central and Eastern Europe
 

Source: Refinitiv, ING

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