When It Comes to Tariffs, It’s Not Over Until It’s Over

On the Feb. 23 episode of The Morning Filter_, _David Sekeraand Susan Dziubinski talk about the Supreme Court’s ruling on the Trump administration’s emergency tariffs and what may come next. Here is an excerpt from the episode.

What Trump’s Tariff Loss Means for the Markets

Susan Dziubinski: Last Friday, the Supreme Court ruling struck down some of the Trump administration’s tariffs. Dave, what could this mean for the markets going forward?

**David Sekera: **Hey, good morning,Susan. I think it was Yogi Berra who once said, “It ain’t over until it’s over.” And at this point, it ain’t over yet. In fact, President Trump already announced some new tariffs under Section 122 of the Trade Act. And these can be in place for the next 150 days without any other kind of legal authorization. My assumption, he’s gonna look to other alternative legal formats or frameworks to be able to put new tariffs out there. And, of course, when those come about, they will impact trade negotiations going forward. But for now, from a broad perspective, I think investors just need to ask themselves, you know, how meaningful is this to future earnings growth for those companies that they’re invested in? Over the past year, I think we need to look at what’s happened while the existing tariffs, or the prior tariffs were in place. And of course, during the negotiations, some of them were suspended, put back in place, and back and forth.

But either way, from an economic point of view, real GDP in the US in 2025 was much stronger than economists had originally anticipated when those Liberation Day tariffs were first announced. Just running through the numbers here, in Q2, we had 3% GDP growth. In Q3, we had 4.4% GDP growth. And then, in the fourth quarter, that was just announced at 1.4% growth. However, if you didn’t have the government shutdown, GDP in the fourth quarter would have been over 2.4%. Here in the first quarter right now, the Atlanta Fed GDP is running at 3.1%. So, again, much higher than any of the economists had expected early last year. Taking a quick look at inflation, that never soared like the economists originally had feared. In fact, if I look at the numbers, I think they were relatively range-bound. CPI was 2.4% last March on a year-over-year basis, crept as high as 3.0% by last September, and most recently came in at 2.4% in January.

So, in my opinion, I think this indicates there are a lot of other factors that are much more important and have a lot more significance to the economy than what the tariffs have been. Just things like the AI buildout boom and the related multiplier effect on the economy that we’ve seen, the boost that we’ve had in net exports, consumer spending being much higher than expected. And all of those right now, for the near-term horizon, are all still impacting the economy as well. So, net-net, we made very few changes to our fair values after the Liberation Day tariffs were first announced. I still suspect that we’ll make very few changes to fair values based on tariffs going forward.

Don’t Overreact: Tariffs Overturned, but Fundamentals Still Rule

The Supreme Court strikes down the president’s use of IEEPA to implement tariffs.

Could Tariffs Go Still Higher Despite the Supreme Court Ruling?

The Trump administration has other ways to keep tariffs high—if the president has the patience for the bureaucracy involved.

Don’t Overreact to the Tariff Tumult

**Dziubinski: **Dave, given what has transpired in the market and with GDP and with inflation while these tariffs were in place during the past year or so, how should investors really be thinking about that impact today?

**Sekera: **I just put out a note last Friday that’s on Morningstar.com. And really, I think the biggest takeaway here, from an investor point of view, is don’t overreact. At the end of the day, it still comes down to fundamentals and valuations. And I’ve got a number of different examples here, which really are kind of going against the grain of what you would expect from what’s going on with all the news. So, if you take a look at Nike NKE stock, originally that popped after the Supreme Court ruling came out, but then it quickly gave up those gains. I think it might have even been down on the day. From an investor point of view, I still think it’s much more about the company’s ability to ward off competitive threats from other brands than it is from what tariffs are doing to their margins here in the short term.

Another example is going to be Walmart WMT. That was actually down 1.5% after the announcement. As a huge importer, and might even actually be the largest importer in the United States, it should have been very positive for Walmart. But Walmart trades at 45 times earnings. So, I think people are much more concerned about whether or not 45 times earnings—which, by the way, we don’t think is the right multiple for a company like that—is too high and whether or not they can live up to that type of valuation. Apple AAPL was a stock that was hit really hard after the Liberation Day tariffs were first announced. I think it was down like 9% pretty quickly over the next couple of days when they were first announced last year. Yet, that stock was only up 1.5% last Friday. I still think from an investing point of view, trying to figure out the long-term intrinsic value of that company is really more about artificial intelligence, how Apple may or may not be successful in incorporating that into their products and services going forward, than about how tariffs might impact their margins over the next couple of quarters or next year.

Subscribe to The Morning Filter on Apple Podcasts_, or wherever you get your podcasts, and keep up with the latest research from hosts Susan Dziubinski and David Sekera on Morningstar.com._

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			39m 52s
		 Feb 23, 2026

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