Federal appeals court tariff ruling signals CFOs to ‘plan for turbulence’

Good morning. A federal appeals court ruled on Aug. 29 that most of the Trump administration’s tariffs on global trading partners are illegal. That means yet another uptick in tariff uncertainty for businesses.

“While the court’s decision introduces fresh uncertainty, tariffs are likely to remain in place for at least a month until a final ruling—which itself is highly uncertain,” Gregory Daco, EY-Parthenon chief economist, told me.

The court’s ruling wouldn’t take effect until Oct. 14, and the Trump administration is expected to appeal the case to the U.S. Supreme Court, which may hear arguments this year or in 2026. On Tuesday, President Trump said he will ask the Court for an “expedited ruling” to overturn the appeals court decision.  

Daco said this ambiguity reinforces the importance of a “tariff tower watch” approach: monitoring legal and policy developments closely while planning across multiple horizons.

In the near term, CFOs should align pricing strategies, revisit supplier terms, and model out cost scenarios, he said. More generally, he advises medium-term contingency planning that spans logistics, margin pressure, inventory management, and customer pass-through dynamics.

I asked Daco about the potential short- and long-term economic consequences for industries that had adjusted to the existing tariffs. Removing tariffs would be economically stimulative—lowering input costs, lifting margins, and potentially accelerating investment, he said.

“But the reality is that any reprieve may prove fleeting,” he explained. The administration retains broad authority to reimpose tariffs through other legal frameworks, such as Section 232 or 301 of U.S. trade law, and “the broader shift toward strategic protectionism is likely to persist,” Daco said.

The impacts of tariffs continue to be top of mind for CEOs and CFOs. Since June 15, there have been 346 earnings calls conducted by S&P 500 companies in which the terms “tariff” or “tariffs” were cited at least once on the call, John Butters, VP and senior earnings analyst at FactSet, told me.

Daco’s biggest piece of advice for finance chiefs: “Plan for turbulence, not just outcomes.”

He recommends that CFOs lean into scenario planning that integrates legal risk, trade exposure, and geopolitical volatility. Build resilience across your supply chain, ensure pricing strategies can flex with cost volatility, and maintain optionality in procurement and production, he said.

EY research and industry reports recommend CFOs prioritize disruptive technology and data in scenario planning to strengthen resilience and decision-making.

“In an environment where the policy goalposts are moving, agility is not a luxury—it’s a necessity,” Daco said.

Now, that’s for certain.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com