US President Donald Trump said on Friday he was disappointed after the Supreme Court ruled that his broad tariffs are illegal. He spoke at a press conference in Washington DC and said he would use another law to impose a 10% global tariff.
He said the 10% global tariff would be added on top of other tariffs. He also said all national security tariffs under Section 301 remain in place, effective immediately.
Tariff Response Plans
Trump said he could cut off all trade with a country and could impose an embargo. He said other legal options on tariffs would be used and that he would take a stronger approach.
He said tariff income would increase and that the US could take in more money from tariffs. He also claimed the court’s decision would make his ability to impose tariffs more powerful.
This announcement injects massive uncertainty into the market, which is fuel for options traders. The CBOE Volatility Index, or VIX, has already spiked above 21 this morning, up from a relatively calm 14 just last week. We should be buying call options on the VIX to profit from the coming weeks of turmoil.
The immediate reaction for equities will be negative, so we must hedge our long positions. Buying put options on the S&P 500 and Nasdaq 100 indices offers direct protection. Looking back from 2025 at the trade escalations of 2018 and 2019, we saw that initial tariff threats consistently triggered market drops of 5% or more.
Sector And Macro Implications
Sectors with heavy international exposure, like technology and industrials, will be hit hardest by a global tariff. We should expect significant downside pressure on companies with complex supply chains. This makes buying puts on specific large-cap tech and manufacturing stocks a targeted strategy.
This action comes at a very difficult time for the economy. With Q4 2025 GDP growth coming in at a soft 2.1% and the latest CPI figures showing inflation stubbornly above target at 2.8%, this tariff threatens to slow growth while increasing prices. This raises the risk of a stagflationary environment.
In this environment, the US dollar could strengthen as global capital seeks a safe haven, despite the policy originating from the US. We can use currency futures to take a long position on the dollar index (DXY). This is a pattern we saw repeatedly during the trade disputes of the late 2010s.
Gold will be the clearest beneficiary as a hedge against this level of geopolitical and economic risk. We should anticipate a flight to safety that will push gold prices higher. Buying call options on gold miners or futures contracts on the metal itself is a direct way to trade this move.
