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On Thursday, the Court of International Trade ruled against the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, affecting 6.7 percentage points of tariff increases since the beginning of the year. The ruling comes as the Dow Jones Transportation Average (DJT) trades at 14,667.6 USD, having declined 7.73% year-to-date, reflecting ongoing market uncertainty around trade policies. InvestingPro data reveals that transportation stocks have struggled particularly in the past six months, with a notable decline of 16.75%. This includes tariffs on Canada, China, Mexico, and the baseline 10% tariff. However, the ruling does not impact sectoral tariffs such as those on steel, aluminum, and auto imports under Section 232, nor does it prevent the administration from using other legal authorities to impose tariffs.
The court’s decision, which came from a three-judge panel, blocks the tariffs that relied on the IEEPA and criticizes the administration’s justification for the tariffs based on immigration and trade deficits. The administration has been given 10 days to stop collecting the tariffs, with no provision for refunds for tariffs already collected. An appeal has been filed, but decisions from higher courts are not expected within the 10-day window.
The Trump administration has other means at its disposal to impose tariffs. It can invoke Section 122 of the Trade Act of 1974 to impose up to 15% tariffs for 150 days to address a balance of payments deficit or prevent a significant depreciation of the dollar. This could theoretically replace the current 10% tariff within days. Additionally, the U.S. Trade Representative could launch Section 301 investigations on key trading partners, which could lead to tariffs after the investigations conclude, with no limit on the level or duration of these tariffs.
Sectoral tariffs under Section 232 could also be expanded to cover additional sectors, and the administration may place more emphasis on these if country-focused tariffs face legal challenges. Section 338 of the Trade Act of 1930 is another unused authority that allows for up to 50% tariffs on imports from countries discriminating against the U.S., without requiring a formal investigation.
Goldman Sachs analysts suggest that the White House is likely to announce a similar across-the-board tariff using Section 122, buying time to initiate a series of Section 301 cases. However, completing these investigations on all U.S. trading partners within several months seems unlikely. Trading volumes remain robust, with InvestingPro showing an average daily volume of 165.53M shares over the past three months, suggesting active market positioning around trade policy developments. This could mean that smaller trading partners might not face a baseline tariff once Section 122 tariffs expire, assuming no legal extension is found.
The fiscal package in Congress is not expected to be impacted by this tariff decision, as tariff revenue was not considered for offsetting the package’s cost. The struck-down tariffs were projected to generate nearly $200 billion annually, which is on par with the fiscal package’s deficit increase next year. Despite the court’s ruling, Goldman Sachs anticipates that the Trump administration will continue to find ways to implement tariffs. Market participants tracking these developments can access detailed analysis and real-time updates through InvestingPro, which offers comprehensive coverage of market implications from policy changes.
In other recent news, Trump Media and Technology Group Corp. announced a significant financial maneuver by securing approximately $2.5 billion through a private placement offering. This capital raise will be used to establish a Bitcoin treasury, marking a substantial investment in cryptocurrency assets. The company plans to utilize $1.5 billion in common stock and $1 billion in convertible senior secured notes for this purpose. Devin Nunes, CEO and Chairman of Trump Media, emphasized the strategic importance of Bitcoin as part of the company’s assets. Additionally, Trump Media has become the first company to list on the newly established NYSE Texas, while maintaining its primary listing on NASDAQ. Meanwhile, the company has addressed reports regarding a $2.3 billion stake sale, clarifying that the filing was a routine re-registration of shares. Rumble, another company in the digital media space, has announced its involvement in the Bitcoin 2025 conference, aligning itself with the principles of decentralization and free speech. Rumble’s CEO, Chris Pavlovski, is set to interview Donald Trump Jr. at the event, highlighting the intersection of digital currency and digital rights.
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