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U.S. tariff ruling and second health insurance shutdown crisis are about to explode
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Hello everyone, today XM Forex will bring you "[XM Official Website]: The U.S. tariff ruling and the second medical insurance shutdown crisis are about to explode." Hope this helps you! The original content is as follows:
The U.S. Supreme Court will make a final ruling on the legality of the Trump administration's tariff policy this Friday. At the same time, along with the main reason for the U.S. government shutdown, the fierce bipartisan debate over the existence of the Affordable Care Act (ACA) to strengthen premium tax credits has become the two most watched policy focuses in the United States in 2026. The results will profoundly affect U.S. domestic governance and the international economic order.
Legal controversy and judicial process of tariff policy
As the core of the judicial game, the Trump administration invoked the "International Emergency Economic Powers Act" promulgated in 1977 in February 2025 to impose additional tariffs on imported goods from specific countries on the grounds of responding to the "national emergency" caused by trade deficits.
The legality of this move has been questioned from beginning to end. During the court oral argument in November last year, liberal and conservative justices of the Supreme Court collectively voiced dissent. Even Justice Neil Gorsuch, promoted during Trump’s first presidential term, warned that “if Congress transfers taxation power to the president, it will be extremely difficult to take it back later.” Chief Justice John Roberts even directly emphasized that “the power to impose tariffs and taxes has always been the core authority of Congress and cannot be ignored.”
The judicial process of this case has long been foreshadowed. The U.S. Court of International Trade took the lead in making a subversive ruling in May this year, determining that the "exclusive jurisdiction to regulate foreign trade" belongs to Congress and that the executive branch has no right to interfere. This ruling was upheld by the Federal Court of Appeals in Washington, DC, in August.
Authoritative experts in the legal field generally predict that the Supreme Court will most likely uphold the original judgment of the lower court. Greg Schafer, a professor of law at Georgetown University, said bluntly: "Judging from the questioning points during the justice debate, the International Emergency Economic Powers Act does not grant the Trump administration the legal authority to impose these tariffs. This conclusion is basically clear. ”
Political Statements and Economic Impact in the Tariff Dispute
Facing the possibility of losing the lawsuit, Trump has recently taken a tough stance on social media, saying that if the ruling is not favorable to him, it will be a “devastating blow” to the United States. He also claimed that “it is the escort of tariff policies that has allowed the United States to rank among the top in terms of economy and national security.” "Unprecedentedly strong ranks".
However, objective economic data show obvious differences: in the third quarter of 2025, U.S. GDP surged by 4.3% year-on-year, hitting a two-year peak; however, the expansion of the job market has slowed down significantly, especially in industries with high import dependence that are deeply exposed to the impact of tariffs. Employment growth lags significantly behind low import dependence. The industry even experienced negative growth.
Johannes Machik, senior economist at the Federal Reserve Bank of Kansas City, pointedly pointed out in a report last December that this data difference is enough to prove that the tariff policy has substantially suppressed the job market.
What is more critical is that if the Supreme Court rules that the government fails. According to the lawsuit, the United States will face real pressure to refund some of the levied tariffs. As early as September this year, U.S. Treasury Secretary Scott Bessant revealed that the government may be "forced to refund nearly half of the levied tariffs." Legal expert Shaffer further clarified: "All entities that have been illegally imposed tariffs will receive tax refund www.xmtraders.compensation in accordance with the law. This is a certain result." ”
However, the Trump administration has made harsh words in advance. Even if it loses the lawsuit, it will find another way and invoke other legal provisions to promote the implementation of the tariff policy.
The dilemma of the survival of the enhanced tax credit for medical insurance
Parallel with the judicial game of tariff rights is the dilemma of the survival of the "Affordable Care Act" to strengthen the premium tax credit.
As early as last year In December, Johnson promised to submit the petition to lift the hold to the House of Representatives for a vote immediately after the holiday recess of Congress. Now this promise is about to enter the fulfillment stage. Judging from the legislative process, the bill is likely to pass smoothly in the House of Representatives and will then be transferred to the Senate for consideration. Since the Senate needs 60 votes to advance the bill, it is expected that the bill will be advanced in two days. The party will negotiate on this and make targeted changes to the bill to meet the requirements of cross-party consensus.
Legislators are currently facing a time crunch in advancing the health care bill: the deadline for the next round of government funding is January 31.
If the issue of enhanced subsidy extension is not resolved by then, Democrats are likely to bring this issue with the government. This is not the first time that this game logic has appeared - in October 2025, because the demands for enhanced subsidy extension were not met, the Democrats refused to support the Republican-led spending plan, which directly triggered the 43-day longest government shutdown in U.S. history. Its impact on market confidence and economic operation.The impact is still fresh in my mind.
Looking back to the source of the policy, the 2022 "Inflation Reduction Act" extended the ACA enhanced subsidies initially established under the 2021 "American Rescue Plan" until the end of 2025. The core function of this subsidy is to reduce the premium burden of millions of ACA market participants and is a key policy tool to maintain the accessibility of the U.S. health insurance system.
At the end of 2025, Congress and the President failed to reach a consensus on the expired enhanced subsidy dispute, which directly triggered a chain reaction: as many as 22 million people faced an average increase in premiums of more than 100%. With the sharp decline in the affordability of medical insurance, it is expected that about 5 million people may www.xmtraders.completely withdraw from the insurance system, and the US medical insurance coverage is at risk of shrinking.
Although lawmakers are expected to reach a www.xmtraders.compromise in 2026, it will no longer cover the January enrollment window.
Judging from the framework of the potential agreement, there is a high probability that people will be given an additional few months of insurance buffer period, the enhanced credit period will be extended by 1-2 years, and it will also include tightening terms for high-income families’ credit qualifications, as well as control measures for what Republicans refer to as “widespread abuse and fraud within the plan.” However, whether this plan can be passed in Congress will depend on Trump’s support attitude and the influence of partisan politics cannot be ignored on this issue.
Summary:
Whether it is the judicial definition of tariff power or the policy continuation of medical insurance subsidies, the final direction of the two major disputes is inseparable from the multiple intersections of political games, judicial rulings and economic fundamentals.
If the Supreme Court denies the legality of tariffs, the United States will need to refund part of the tariffs, exacerbating the fiscal deficit, and adding to the uncertainty of trade policy, the US dollar's credit will be damaged and weakened. Gold will be supported by rising risk aversion and falling real interest rates;
If the ruling recognizes the legality of tariffs, the narrowing of the trade deficit and rising inflation expectations will strengthen the US dollar, and gold will be suppressed.
If ACA subsidies are extended, short-term stable consumption will be neutral to the US dollar, but long-term fiscal expenditure expansion will suppress the US dollar. Gold will be supported by fiscal concerns; if it is not passed, the government may return to a shutdown, and the surge in public medical expenditures will drag down the economy. The US dollar will weaken and gold will rise due to safe-haven demand.
Both are transmitted through fiscal expectations, risk aversion and economic fundamentals, and the US dollar and gold generally react in opposite directions.
The above content is all about "[XM Official Website]: The U.S. tariff ruling and the second medical insurance shutdown crisis are about to explode". It was carefully www.xmtraders.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!
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