Court Says Trump Overstepped With Tariffs, But Tariffs Are Here to Stay

A U.S. federal trade court just ruled that President Trump overstepped his authority when he imposed 10% across-the-board tariffs under the IEEPA (International Emergency Economic Powers Act). The court found that the law didn’t justify such broad trade restrictions and ordered the tariffs removed.

Markets initially welcomed the news. U.S. stock futures jumped more than 1%, seemingly celebrating a potential end to the tariffs that have weighed on global trade for years. But the optimism faded quickly—by the time markets opened, gains had narrowed to under 0.5%.

That’s telling. The market isn’t convinced that tariffs are going away. In fact, this ruling may just push Trump to double down using other legal tools to maintain pressure on trade partners.

Trump Isn’t Giving Up

The Trump administration has already appealed the ruling, likely taking it all the way to the Supreme Court. But even if the appeal fails, Trump has other levers he can pull—and fast.

“Even if we lose, we will do it another way,” Trump trade advisor Peter Navarro told reporters at the White House.

That “other way” is already mapped out in U.S. trade law.

The likeliest move? Replace the IEEPA-based tariffs with new ones under Section 122 of the Trade Expansion Act. This allows the President to impose tariffs of up to 15% for a temporary period of 150 days, without requiring any formal investigation. All he needs is to claim a balance of payments issue or risk of U.S. dollar depreciation—broad justifications that can be used at short notice.

It’s a stopgap, but it buys time.

During those 150 days, the U.S. Trade Representative can initiate Section 301 investigations into key trading partners. These take longer—likely several months—but once completed, they allow the U.S. to impose tariffs with no cap on level or duration.

In short: Trump can reintroduce Section 122 tariffs almost immediately, and then follow up with permanent Section 301 tariffs later. It's a two-step process to reassert trade leverage.

If the administration finds country-wide tariffs harder to justify, it may pivot toward sector-specific tariffs—which are more defensible legally. There’s precedent for this. Trump previously used Section 232 tariffs on steel, aluminum, and autos, citing national security concerns.

Now, analysts expect those to expand into new areas like semiconductors, electronics, and pharmaceuticals. It's a less noisy, but just as effective route.

There’s even an obscure legal option: Section 338 of the 1930 Trade Act. It allows the President to slap tariffs of up to 50% on countries that discriminate against U.S. goods—no investigation required. It’s never been used, but it’s on the books and could be a wildcard.

Bottom line: there are enough tools in the toolbox to ensure tariffs stick around. And enough time for Trump to renegotiate trade terms with other countries.

Investing in a World of Uncertainty

This ruling proves one thing—there are still checks and balances. Trump doesn’t have unlimited power. But it also proves how quickly policies can shift lanes and reemerge under different legal authority.

So no, tariffs aren’t gone. They’ve just evolved.

Don’t celebrate too early, but also don’t panic.

Stay calm. Stay invested. Markets climb a wall of worry—and those who bought in a month ago, during the peak of tariff pessimism, have already seen meaningful gains.

It rarely pays to be a permabear.