It’s not a new opinion from Piper, necessarily—the bank laid out its reasoning in April, shortly after Trump’s “Liberation Day” announcement of universal tariffs under the IEEPA. Then as now, it sees a 9-0 ruling in the Supreme Court against Trump as more likely than a Trump win.

The reason that the Piper Sandler team of Andy Laperriere, Don Schneider and Melissa Turner is revisiting the subject is that oral arguments in these and similar cases are scheduled through September. The U.S. Court of Appeals for the Federal Circuit will hear oral arguments on whether Trump truly has unlimited authority under IEEPA to impose tariffs on Thursday, July 31. Piper Sandler forecasts that appellate courts will issue rulings over the next several months.

“Trump will probably continue to lose in the lower courts, and we believe the Supreme Court is highly unlikely to rule in his favor,” the bank said. Here’s why.

Stiff resistance

Trump’s trade policy has encountered stiff resistance as lower courts push back against the administration’s sweeping claims of executive authority. On May 28, the U.S. Court of International Trade (CIT) ruled unanimously against Trump’s use of IEEPA for tariffs, calling the administration’s arguments unconvincing. The decision is now under appeal.

In a separate May 29 ruling, D.C. District Judge Rudolph Contreras found that IEEPA does not enable the president to impose tariffs at all and ordered an immediate reversal of certain duties—though that order is currently stayed pending appeal.

According to Piper Sandler, the heart of the matter is congressional intent. As it did in April, the firm argues that IEEPA, enacted in 1977, was designed to give the president certain emergency economic powers, but not blanket authority to set tariffs. Courts have consistently rejected the idea that the statute includes such sweeping power.

Even recent bilateral deals, such as Trump’s agreement with Japan, do not cure the underlying legal flaw. Congress, not the president, holds the ultimate authority to impose tariffs and approve international trade agreements. Piper Sandler stresses, “Making a deal with another country has no bearing on the legality of Trump’s tariffs,” highlighting that executive-led deals absent congressional approval lack legal standing. “If Trump does not have the authority to impose tariffs he is claiming, it doesn’t matter whether he makes a deal with Japan or anyone else.”

Billions and bilateral deals at stake

If the Supreme Court rules against Trump, all trade deals and announced tariff changes made under IEEPA—including minimum 10% import rates and threatened reciprocal tariffs—would be declared instantly illegal. Refunds could flow to companies and individuals who have paid unlawfully imposed tariffs, if they file claims with the CIT.

The massive, headline-grabbing $550 billion Japanese investment pledge is cited by Piper Sandler as an example of economic promises lacking clarity, specifics, or legal durability.

“Our trading partners and major multinationals know Trump’s tariffs are on shaky ground,” the Piper team writes. “It’s notable the promise of $550 billion in Japanese investments in the U.S. is accompanied by no details. It’s not clear where the money will be coming from, who will decide how it is allocated, and over what period the $550 billiln will be spent.”

Despite all these reasons the tariffs are clearly illegal, Piper insists that the tariffs are likely to go up from this point and “remain at record levels for the next many months.” Here’s why.

Will tariffs go away soon?

Piper Sandler’s analysts caution that tariffs are likely to remain in place in the near term, supported by administrative stays and the slow judicial process. Even if reciprocal tariffs are struck down, Trump could pivot to other statutes, such as Section 232 (covering steel, aluminum, and cars), though these have even stricter legal guardrails and could invite further litigation. Trump is on “strong legal ground” in using Section 232 to impose tariffs on steel, aluminum and cars, the bank says, but he may try to stretch that authority as he has done with other trade statutes. “The base case is there will be years of legal battles over tariffs.”

The research note details at least eight ongoing lawsuits from a diverse range of plaintiffs—including states, tribes, and small businesses—all challenging Trump’s use of IEEPA. Court dockets now stretch across several federal circuits, signaling that “years of legal battles” may follow, even if Trump loses at the Supreme Court.

Piper Sandler emphasizes that major multinational corporations and foreign governments see U.S. trade policy as unstable. The result, they argue, is reluctance to invest heavily in the U.S. until the legal landscape becomes clearer—a situation that may persist for months, if not years, irrespective of any immediate court ruling.

Piper Sandler’s analysts express confidence that recent judicial skepticism of the executive branch’s unchecked statutory interpretations will carry over to the Supreme Court. The bank finds the conservatives on the court likely to vote just as they did in a series of recent cases, in which they “lined uniformly against the Executive Branch pulling out an old statute and asserting far-reaching, never-before-used authority nowhere found in the text of the statute.” The liberals are also not likely to grant unlimited authority to Trump.

Still, with Trump’s well-known litigious nature, and the legal calendar ahead, Piper concludes: “Instability surrounding trade is likely to last a lot longer.”

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.