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Confidence in Trump tariff powers has plunged across both regulated and blockchain-based prediction markets following this week’s Supreme Court hearing. Traders on Kalshi, a U.S.-regulated event market, now assign just a 29% chance that the court will uphold the former president’s broad use of emergency tariff authority which is a dramatic 28-point drop in a single day.
On Polymarket, a decentralized on-chain prediction platform where trades settle in USDC, odds fell further to 25%, signaling a steep decline in trader confidence. Combined trading volume across both platforms exceeded $1.3 million, underscoring how prediction markets are increasingly serving as real-time indicators of political and judicial sentiment.
“Markets are reflecting a recalibration of expectations after the justices’ skepticism,” said David Reif, senior policy analyst at FinReg Watch. “The price action shows traders no longer view Trump’s tariff powers as likely to survive unscathed.”
The downturn in market sentiment followed hours of oral arguments before the U.S. Supreme Court, where several conservative justices questioned whether the president can unilaterally impose import duties under a 1977 emergency-powers law.
The case centers on whether the Trump tariff powers under the International Emergency Economic Powers Act (IEEPA) allow the executive branch to bypass Congress in levying tariffs. Chief Justice John Roberts and Justices Neil Gorsuch and Amy Coney Barrett expressed doubts over such expansive use of presidential authority.
“Tariffs are, in essence, taxes and taxation is Congress’s domain,” Roberts noted during questioning, according to an Associated Press report. Gorsuch warned that granting unchecked discretion could create a “one-way ratchet” toward executive overreach.
The alignment between Kalshi’s regulated odds and Polymarket’s on-chain predictions marks an unusual convergence between fiat and crypto-native traders. Both appear to interpret the court’s posture as limiting the Trump tariff powers that once shaped fiscal and trade policies.
On Wednesday, the markets experienced their largest single-day decline since the Supreme Court accepted the case in September. Traders now expect a narrower ruling that constrains future presidential authority under emergency economic laws which is a decision that could redefine how fiscal leverage interacts with global trade and digital assets.
Decentralized prediction platforms like Polymarket often act as crowd-sourced early warning systems, said Clara Yu, a researcher at the Blockchain Policy Institute. The drop in the Trump tariff powers market shows how crypto traders price in political risk far faster than traditional equity markets.
Historically, Trump tariff powers have had ripple effects across crypto markets. Earlier trade policies under his administration fueled inflation fears and led many investors to view Bitcoin as a hedge against fiscal instability. Yet tariff-driven uncertainty has also prompted risk-off sentiment, causing short-term sell-offs as traders rotated into safer assets like stablecoins and U.S. Treasuries.
If the Supreme Court ultimately limits Trump tariff powers, analysts suggest it could dampen volatility in both foreign exchange and digital asset markets, as reduced executive flexibility might stabilize U.S. trade expectations.
The outcome could set a precedent not just for presidential power, but for how global investors hedge policy risk through decentralized markets, Yu added.
As traders continue to adjust their positions, prediction platforms remain a unique gauge of sentiment as one that bridges traditional finance with the blockchain era’s transparency and speed.
