Trump can offset tariff ruling with other taxes, says Goldman Sachs

Trump could apply Section 122 tariffs of up to 15 per cent for 150 days or initiate investigations under Section 301, though those would take longer to implement

By Katia Dmitrieva

 

A court ruling that seeks to block President Donald Trump’s “Liberation Day” tariffs represents only a temporary setback to his trade agenda and can be offset by other taxes, according to analysts at Goldman Sachs Group Inc.

 

The judgment by the US Court of International Trade halts 6.7 percentage points of levies announced this year and the White House could use other tariff tools to make up for that, the bank’s economists said in a note to clients Thursday. 

 

“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,” chief US political economist Alec Phillips wrote. “For now, we expect the Trump administration will find other ways to impose tariffs.” 

 

The alternatives include the use of Section 232 levies, referring to the charges on steel, aluminum and auto imports on national security grounds. If all the pending investigations result in 25 per cent tariffs and are added to current levies under the section, that would add 7.6 percentage points alone, they said. 

 

The trade court in Manhattan ruled on Wednesday that Trump wrongfully used an emergency law to collect tariffs on global trading partners, siding with a group of small businesses and Democratic-led states. A panel of three judges gave Trump’s team 10 days to halt tariff collection in a decision that the White House has already appealed.

 

Trump has other options at his disposal to impose levies. He could apply Section 122 tariffs of up to 15 per cent for 150 days or initiate investigations under Section 301, though those would take longer to implement.