President Donald Trump has been dealt a significant blow to his trade policies, with a federal court ruling against his authority to impose global tariffs. However, the president is likely to find a workaround to this setback.
What Happened: Goldman Sachs economists believe that the court’s decision will only be a temporary obstacle, as the Trump administration has other legal ways of imposing tariffs. These include Section 122 of the Trade Act of 1974, Section 301 investigations and Section 338 of the Trade Act of 1930, reported CNBC.
Section 122 allows the administration to swiftly impose tariffs—up to 15%—without a formal investigation, offering a quick workaround to court obstacles. However, Goldman analysts note the measure would expire after 150 days unless Congress intervenes.
Meanwhile, Section 232 tariffs on steel, aluminum, and autos may be expanded to other sectors, while Section 338 permits the president to impose up to 50% tariffs on imports from countries that discriminate against the U.S.
The White House could shift its focus from targeting specific countries to targeting industries instead — an approach that rests on more solid legal footing, as per Goldman Sachs.
Steven Blitz, TS Lombard‘s chief U.S. economist, opined, "The first thing he will probably do is an emergency appeal to the Supreme Court … wanting to get a ruling from them that basically says you can keep these tariffs in place while the appeals process runs through."
Speaking about the Trump Administration’s appeal within minutes, Deutsche Bank's Jim Reid said a note, "We should say at the outset that this is hardly the end of this story,” reported Fortune.
Latest Startup Investment Opportunities:
Why It Matters: The court’s ruling could have a significant impact on the administration’s trade strategies. The decision, delivered by the U.S. Court of International Trade, could potentially halt the administration’s trade war efforts.
Legal experts and economists have supported the court’s decision stating that the President was wrong to claim a virtually unlimited power to impose tariffs. However, some economists in the past stated that Trump tariffs are ‘addictive’ and could remain in place even if the Democrats come back to power as they may not want to discontinue the lucrative revenue stream.
Meanwhile, China has already responded to the court’s decision, calling on the United States to entirely withdraw the unilateral tariff measures that the court blocked.
Despite the setback, Trump is expected to find a way around the court’s ruling, potentially using other legal means to impose tariffs. The market reaction to the ruling has been mixed, with equity markets around the world broadly rising, while the reaction in Europe has been more muted.
During Thursday’s pre-market, The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ rose 1.06% and 1.55%, respectively.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Edge Rankings
Price Trend
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
