Goldman thinks reciprocal tariffs could be replaced with Section 122 tariffs for 150 days while Section 301/232 tariffs are put in place country by country pic.twitter.com/ws2mU6cdfu
— Special Situations 🌐 Research Newsletter (Jay) (@SpecialSitsNews) May 29, 2025
Goldman Sachs says recent tariff court ruling is just noise. Trump won’t back down, and neither will the White House. This legal setback barely scratches the surface of tools still in play. The administration has multiple ways to keep tariffs coming, and markets better be ready.
The ruling targets IEEPA-based tariffs. But Section 232 tariffs on steel, aluminum, and autos remain untouched. These sector-based tariffs stand firm since they come from a different law. Goldman Sachs expects more tariffs on pharmaceuticals, semiconductors, and electronics soon. Legal uncertainty around IEEPA might push the White House to lean harder on these sector tariffs. This shift could bring long-lasting pressure on key industries while keeping the legal fight at bay.
Even if appeals fail, Section 122 of the Trade Act of 1974 offers a quick fix. The president can impose up to 15 percent tariffs for 150 days without formal investigation. That’s a temporary bridge but it buys time for the administration to launch longer, more durable Section 301 investigations targeting specific countries. Section 301 tariffs can be unlimited in size and duration but require investigations that take weeks or months. This staggered approach gives the White House flexibility despite court challenges.
Goldman also highlights Section 338 of the Trade Act of 1930. This forgotten law lets the president slap tariffs up to 50 percent on countries discriminating against the U.S. It has never been used but does not require congressional approval or public evidence disclosure. Some Democrats want it repealed because it hands massive power to the president. But Trump’s team could see it as a hidden ace in the hole.
The stakes are huge. The court ruling wiped out about 250 billion dollars in projected annual tariff revenue. Over ten years that’s 2.5 trillion dollars lost. Trump’s budget proposal calls for 5 trillion dollars in spending. If tariffs are blocked, bondholders face another 7.5 trillion dollars in debt, a 50 percent increase from current levels. Yields are already climbing as investors question America’s fiscal path. Even if Trump wins the appeal, volatility is here to stay.
This legal skirmish doesn’t end the tariff saga. It changes the game and raises questions about debt, spending, and economic risks. Bond investors are jittery, markets expect more twists, and Washington’s toolbox remains crowded. Trump’s next move might not be legal finesse but political brinkmanship. And that is the real risk.