Tariffs Blocked By Court, But Goldman Sachs Says Trump Could Reimpose Them 'Within Days'

The Court of International Trade blocked a large portion of President Donald Trump‘s latest tariff policies, but according to Goldman Sachs economist Alec Phillips, the White House has a clear and swift path to restoring most of them—potentially within days.

In a note shared Thursday, Phillips wrote that the Court’s ruling represents a legal setback for the administration, but not necessarily a policy one.

The court struck down 6.7 percentage points of tariffs imposed this year under the International Emergency Economic Powers Act (IEEPA), declaring the legal foundation unconstitutional.

The blocked tariffs include the 10% across-the-board duty, a 20% tariff on Chinese imports, and a 25% tariff on non-USMCA-compliant goods from Canada and Mexico. Together, they were projected to generate close to $200 billion annually.

Stocks positively reacted to the news. The S&P 500 – as tracked by the SPDR S&P 500 ETF Trust SPY – rose 0.6% on Thursday, and is on track to notch its strongest month of gains since November 2023.

White House Has Tools To Move Quickly

The Court of International Trade has given the administration 10 days to stop collecting the duties, but Phillips anticipates the Trump administration responding quickly.

"We would expect the White House to announce a similar across-the-board tariff using Sec. 122," Phillips said.

That part of the trade law lets the president impose up to 15% tariffs for 150 days without needing Congress. It's designed to address currency issues or trade imbalances and is much easier to activate than other options.

“The administration could theoretically replace the current 10% tariff with a Sec. 122-based tariff within days if deemed necessary,” Phillips added.

Phillips also said the White House could start new investigations under another trade tool—Section 301—which would allow even steeper and longer-lasting tariffs. That path takes longer, but it could open the door to targeting major trade partners like China again.

Legal Uncertainty To Shift Focus On Sectoral Tariffs?

Goldman also believes the ruling could pivot the administration toward sector-specific tariffs, which remain on firm legal ground under Section 232, the authority Trump previously used to target steel, aluminum and autos.

"Uncertainty regarding the IEEPA-based tariffs could lead the White House to put more emphasis on sectoral tariffs, where there is much less legal uncertainty," Phillips said.

That means more duties could soon be imposed on goods like semiconductors, electronics, and pharmaceuticals—sectors in which Trump's trade team has already shown interest.

Those actions fall under Section 232, which remains untouched by the court's ruling and could add another 4.9 percentage points to U.S. tariff rates.

No Refunds Coming, But Fiscal Plans Stay Intact

While importers may be spared future tariffs, duties already paid will not be refunded. Despite the magnitude of potential lost revenue, Goldman Sachs doesn't expect a material impact on the fiscal debate in Congress.

"Tariff revenue was never counted toward offsetting the cost of the package," he said.

Still, the blocked tariffs were set to generate nearly as much revenue as the new fiscal package will add to the deficit in its first year—roughly $200 billion.

“We expect the Trump administration will find other ways to impose tariffs, so we still expect most of this revenue to materialize.”

Read Next:

• US Stocks Likely To Open Higher After Federal Court Blocks Trump’s Tariffs: ‘Without Tariff Revenues, There Is A Big Beautiful Hole In The Big Beautiful Budget Bill,’ Says Expert
  

Photo: Shutterstock