V.O.S Selections v. Trump is an ongoing civil lawsuit in which a coalition of states, small businesses, and individuals sued the federal government to challenge the legality of tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). The main constitutional question surrounding this case is. Were the tariffs implemented within the boundaries of the law, or were they an overextension of presidential and executive branch authority?
The constitutional Argument
On one hand the small businesses, individuals, and states collectively against the tariffs argue that Trump overstepped his authority in imposing the tariffs which are effectively a tax–powers that the constitution explicitly reserves for congress. They contend that using IEEPA to levy import duties violates the separation of powers and is illegal. On the other hand, Trump and his allies state that the tariffs aim is to reshore manufacturing and correct longstanding trade imbalances with other nations. Not to raise revenue (a tax). Although, Trump has consistently boasted of the revenue raising capabilities of his tariffs and how they could even someday replace the income tax.
Timeline of Events
Okay lets start from the beginning. In February of 2025 Trump invoked IEEPA–a 1977 law granting the president the power to regulate trade in response to an emergency–to impose tariffs on Canadian, Chinese, and Mexican goods. Trump used the illegal trafficking of drugs into the U.S as the emergency that called for the regulation. Then, on April 2nd 2025, Trump announced a broad package of import duties dubbed “Liberation Day”. His aim was to institute reciprocal tariffs at a 10% base rate on imported goods from almost every country in order to rectify the U.S’s trade deficits (where imports exceed exports). Trump and the administration declared the trade deficits a national emergency and invoked IEEPA to permit the tariff implementation. This poses a question for the reader, does IEEPS’s language–granting the president power to “regulate trade in response to an emergency”--extend to imposing tariffs that function as taxes?
Lower courts initially ruled against Trump in two previous scenarios, both of which Trump appealed. Now the supreme court is hearing the case with the first hearing already having occurred on Wednesday November 5th. The supreme court is made up of 6 conservative appointed judges and 3 liberal appointed judges. Some think this could help Trump win big but some think the recent hearing proved otherwise as conservative appointees such as Amy Coney Barett—who was appointed initially by Trump himself–seemed skeptical of the rationale behind the tariffs implementation.
Implications of the case
Trump has called V.O.S Selections v. Trump “one of the most important cases in the history of our country”. He has also said it would be "devastating" if the administration loses this case. The stakes are indeed high. For one, if the administration loses, billions of dollars in tariff revenue is at stake. Around 90 billion dollars worth of import taxes already paid could have to be paid back, per a Wells Fargo analyst. Reversing these payments would be a logistical nightmare many say.
Those against the tariffs say that if the court rules in favor of Trump, then what would prohibit congress from being void of all taxation responsibility? What would stop the executive branch from accruing more and more taxation power over time? On the other side, proponents of the tariffs say that if the court rules against Trump, the complications that ensue from paying back tariff revenue and negating already established trade deals will wreak havoc on our government.
Equity Insights
↓Nvidia(NVDA): Nvidia faced a broad(ish) selloff on Tuesday after Japan's SoftBank disclosed they sold their multi-billion dollar stake in the company to bolster their investment in OpenAI. Along with this, murky tech evaluations are starting to worry some on wall street (so NOW they’re catching on).
↑Circle Internet Group (CRCL): Fresh off the back of a Q3 earnings beat the future is bright for the 2nd largest stablecoin issuer behind only tether (USDT issuer). Price is slightly down as of Wednesday based on a raise in forecasted 2025 expenses from the Wednesday morning earnings call. But fear not, stablecoin issuance is set to grow YoY, this will cause major revenue growth for circle as higher issuance directly equates to higher revenue from their reserve holdings (higher amounts of interest earned on fiat money customer deposits).
Theme of the Week
In finance, the private market is a financial environment where investments are made in assets and securities that are not traded on public stock and/or bond exchanges. Some examples are investments in privately owned companies or real estate investments. These investments offer the potential for higher return, albeit at a higher risk. The private space has lower regulations i.e., is less safe for retail traders, has high minimum investments, and can be very illiquid.
Recently we have seen a massive trend of big institutional players buying up/acquiring private market exchanges to expand their clients' access to this sector. To name a few, Charles Schwab recently acquired Forge Global, a private stock provider. Morgan Stanley acquired Equity-Zen, a private shares platform. Goldman Sachs bought out Industry Venture, a company that compiles pre-IPO stocks into funds made available to investors. And finally, BlackRock acquired HPS Investment Partners, a private credit lender who gives firms/individuals access to this tool. Pretty much all of the firms acquired by these mega-caps are pre-ipo firms. Considering the U.S market is currently very overvalued, banks are seeking to diversify their clients holdings. Private markets and pre-ipo offerings are the means to this end.
Institutional players such as these mega-cap firms want to be at the forefront of the expanding shift to private market investments. These firms recognize that upcoming fintech innovations like tokenization and blockchain technology will revolutionize the private market by lowering the barriers to entry. Making the private market cheaper, more accessible, and more liquid. These big players are buying up pre-established platforms instead of building out their own private market infrastructure, indicating the need for rapid shift into the space. The latter part of the first quarter of the 21st century has been marked by financial companies trying to expand their alternatives businesses, i.e., investments falling outside the traditional realm of public stocks, bonds, and cash. All the aforementioned companies acquiring private market infrastructure is proof of this seismic shift in the financial world.
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