It’s getting pretty heated in Washington. You might’ve seen the headlines, but the vibe is shifting fast. President Donald Trump is officially at war with the very people who helped build his judicial legacy. Just this week, as we hit mid-January 2026, the President went on a tear against the U.S. Court of International Trade and, perhaps more surprisingly, his old allies at the Federalist Society.
Why? Because his signature "Liberation Day" tariffs are on life support.
The Ruling That Started the Fire
Basically, a three-judge panel threw a massive wrench in the administration’s plans. They ruled that the President overstepped his authority when he used the 1977 International Emergency Economic Powers Act (IEEPA) to slap sweeping tariffs on almost every country. The court basically said, "Hey, you can't just declare a national emergency over a trade deficit and bypass Congress entirely."
Trump didn't take it well. Honestly, "not well" is an understatement. On Truth Social, he called the decision "horrible" and "Country threatening." He even went as far as to say the judges were "destroying America." But the real shocker wasn't the attack on the judges—it was who he blamed for them being there in the first place.
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"Sleazebags" and Bad Advice: The Breakup with the Federalist Society
For years, the Federalist Society was the gold standard for conservative judicial picks. If you wanted a seat on the bench under a Republican, you needed their stamp of approval. But now, Trump is claiming he was sold a bill of goods.
He specifically targeted Leonard Leo, the former leader of the group. Trump called him a "real sleazebag" and a "bad person who probably hates America." He’s basically saying that back when he was "new to Washington" in 2016, he followed their advice blindly, and now those same judges are ruling against him.
It’s a wild turn of events. Remember, this is the group that helped seat Gorsuch, Kavanaugh, and Barrett. Now, Trump is saying their "bad advice" on judicial nominations is the reason his economic agenda is being "railroaded by activist judges."
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- The Irony: One of the judges on the panel that ruled against him, Timothy Reif, was actually a Trump appointee from his first term.
- The Defense: Leonard Leo isn't staying quiet. He’s been pointing out that the federal judiciary is more conservative than ever because of those picks. He called it Trump's "most important legacy," even if the President is currently trashing it.
"We're Screwed": The Trillion-Dollar Panic
Why is the President so stressed? Because if the Supreme Court doesn't reverse this ruling—and they’re expected to weigh in as early as tomorrow, January 14—the financial fallout could be catastrophic.
Trump warned yesterday that if the tariffs are permanently struck down, the U.S. might have to pay back "Hundreds of Billions of Dollars" in revenue already collected. He even floated the number of trillions when you factor in private investments companies made to avoid the levies.
"WE'RE SCREWED!" he wrote.
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It’s a complete mess. Justice Amy Coney Barrett even used that exact phrase—"complete mess"—during oral arguments in November when discussing how the government would even begin to handle refunds. If you've ever tried to get a $20 refund from a cable company, imagine trying to get $200 billion back from the federal government.
What This Means for 2026
We are heading into the midterms, and the President is already telling House Republicans to pivot. He’s suggesting they focus on healthcare and maybe even be "flexible" on issues like the Hyde Amendment to win over voters. It’s clear he knows the tariff battle is a massive political risk.
If the Supreme Court rules against him, he’s already mentioned a "Game 2 plan," but he admits it’ll be slower. In the meantime, he’s doubling down on new threats, like a 25% tariff on any country doing business with Iran.
Actionable Insights: What You Should Do Now
If you're a business owner or just someone worried about the economy, here’s how to navigate this:
- Watch the SCOTUS Docket: A ruling is expected any day now (likely Wednesday). This will determine if prices on imported goods stay where they are or drop significantly.
- Audit Your Supply Chain: If the Supreme Court strikes down the IEEPA tariffs, talk to your customs broker immediately about refund eligibility. The DOJ has already hinted that refunds could be on the table for certain countries like Brazil and India.
- Hedge for Volatility: Regardless of the ruling, the President’s "Game 2 plan" means trade uncertainty isn't going away. Don't assume the status quo will last through the summer.
- Ignore the Rhetoric, Focus on the Law: Trump’s attacks on the Federalist Society are a political distraction. The real issue is the legal limit of the 1977 IEEPA. If you're making long-term investments, base them on statutory limits, not executive orders.
The next 48 hours are going to be a rollercoaster. Keep your eyes on the high court.