Goldman Sachs: "Four tools at the Trump administration’s disposal after a U.S. court blocks tariffs"

From CNBC, May 29: 

• A U.S. trade court ruled that Trump had overstepped his authority by invoking an emergency law to impose sweeping tariffs on nearly every country.
• Economists at Goldman Sachs said the White House likely has a few tools at its disposal to ensure it is only a temporary problem.
• Lawyer James Ransdell said the ruling marks the first in many cases still pending — and is the first opinion “to really address the meat of the plaintiffs challenge.”

U.S. President Donald Trump is expected to find a workaround after suffering a major blow to a core part of his economic agenda.

The U.S. Court of International Trade on Wednesday ruled that the president had overstepped his authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs on numerous countries.

The Manhattan-based court not only ordered a permanent halt to most of Trump’s tariffs, but also barred any future modifications to them.

A panel of three judges gave the White House 10 days to complete the formal process of halting the tariffs. The Trump administration swiftly appealed the ruling.

Economists at Goldman Sachs

said the White House has a few tools at its disposal that could ensure it is only a temporary problem.

“This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major US trading partners,” analysts at Goldman Sachs said in a research note.

“For now, we expect the Trump administration will find other ways to impose tariffs,” they added.

Options on the table

The Wall Street bank said the ruling blocks the 10% baseline tariff imposed by Trump on most imports, as well as the additional tariffs on China, Canada and Mexico – but not sectoral tariffs, such as those imposed on steel, aluminum and autos.

The Trump administration does have other legal means of imposing tariffs, however, according to Goldman. These include Section 122 of the Trade Act of 1974, Section 301 and Section 338 of the Trade Act of 1930.

Section 122 does not require a formal investigation and could therefore be one of the swiftest ways to get around the court roadblock.

“The administration could quickly replace the 10% across-the-board tariff with a similar tariff of up to 15% under Sec. 122,” analysts at Goldman said. They noted, however, that such a move would only last for up to 150 days after which law requires Congressional action....

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