2 laws Trump could use to reimpose his tariffs (and why he might use both)

Economic

Summary:

A court blocked Trump’s tariffs, but he could reimpose them using two key laws from 1962 and 1974. He may combine short-term and long-term powers to bypass legal setbacks and maintain pressure.

President Trump's trade plans ran into a stumbling block this week when a court blocked a wide swath of his tariffs.

But he could bounce back quickly even if White House plans to appeal the defeat don't pan out.

That's because Congress has been handing its tariff powers over to the executive branch for decades, with an array of other authorities at the ready — especially from two laws passed in 1962 and 1974 — if Trump needs to reimplement things like his "Liberation Day" tariffs by different means.

"It's a setback [but] it doesn't mean that the president can't find other means or authorities to try to implement this policies, and it's also just the first step in litigation," Greta Peisch, a former Biden administration trade general counsel, now at law firm Wiley Rein, noted in a Yahoo Finance appearance Thursday morning.

Wednesday's decision from the US Court of International Trade pointed out that other laws essentially give the president the authority to act in a similar manner, even while striking down Trump's actions so far that it said "exceed any authority granted to the President."

This week's decision called into question Trump's authority under a 1977 law called the International Emergency Economic Powers Act (IEEPA). But two alternatives quickly emerged among trade experts if the court ruling stands, with Trump showing no signs of backing away from his tariff ambitions.

The most prominent quick strike option is the so-called balance-of-payments authority derived from Section 122 of the Trade Act of 1974. That power could allow Trump to move quickly, but with a 150-day limit on how long any tariffs can be in place.

The second route is a possible renewed focus on sectoral duties such as "Section 301" or "Section 232" tariffs.

These long-established tariff authorities (one derived from the Trade Act of 1974 and another from a separate Trade Expansion Act of 1962) are ones Trump has used in the past, but with the downside, from his perspective, that they can take time to implement.

Perhaps the most intriguing scenario involves the president moving on both fronts to try to quickly implement a short-term patch followed by a permanent fix.

Either way, Trump has offered signs in recent days that he is more focused on sector-specific tariffs at the moment and has no intention of backing down from trade threats.

In comments on Sunday, Trump said he cared if tariffs helped the US produce things like military equipment and semiconductors, but "we're not looking to make sneakers and t-shirts."

Then, on Wednesday before the ruling, Trump reacted angrily to the notion that he has "chickened out" on tariff plans, saying even the suggestion that he has backed down is "the nastiest question."

2 front-and-center options that could go hand in hand

The balance-of-payments authority is a likely immediate-term option for Trump if he wants to act quickly.

But the limitations of that choice "are clear," Henrietta Treyz of Veda Partners said in a note.

That's because this authority allows the president to have new tariffs in place within days, but only up to a 15% rate and for a 150-day span unless Congress extends it.

These types of duties have been discussed in Trump's circle for years but took a back seat to IEEPA when he came into office this year.

The second options are more legally established and more permanent but slower.

These are tariff authorities — most prominently via the national security-focused Section 232 of the Trade Expansion Act of 1962 — where Trump can act unilaterally, but with the administration required to jump through time-consuming hoops like investigations and soliciting of public comment before the tariffs can go into place.

But the upside for Trump here is that these are well-tested legal authorities that have even been used in recent months on goods like steel, aluminum, and cars.

The White House is currently conducting additional investigations into goods like pharmaceuticals and semiconductors, with that process likely to give Trump new options by this summer.

A similar tariff authority, but one premised on economic security, is Section 301 of the Trade Act of 1974, which also includes the requirement for an investigation before implementation.

Section 301, it's worth noting, is the authority Trump relied on in his first term to implement an array of tariffs on goods from China.

It's a legal landscape that could add up, Goldman Sachs warned in a note, to a situation that "increases uncertainty but might not change the final outcome for most major US trading partners."

That's in part because one scenario outlined in the note even sees Trump rely on both authorities in sequence.

First, the president could invoke that balance-of-payments authority to quickly keep tariffs in place before he then launches sector-specific investigations to eventually make them permanent.

Peisch also sees a good chance of a multistep process ahead, with the administration pursuing all avenues, including litigation, but with the quick strike balance-of-payments authority front of mind as an option "in the short term."

Other options

Other options at the president's disposal are seen as less likely at the moment but remain on the table.

The Trade Act of 1974 also has a Section 201 that gives the president other tariff authorities.

Reaching even further back in US history, the Trade Act of 1930 allows the president to impose tariffs, which Goldman notes has never been used and bears similarities to Section 301 authority "but does not require a formal investigation."

The recently advanced "big, beautiful bill" could give Trump yet another tool, with changes to Section 899 of the IRS code aimed at tightening restrictions on "discriminatory foreign countries" and giving the president the power to levy new taxes to combat these practices.

For now, Wednesday's ruling gives the administration 10 days to halt tariff collection. The administration quickly filed two legal notices to state that it planned to appeal the decision and ask for a pause in the enforcement of the court's order.

The administration also indicated in a court filing Thursday that it may ask the Supreme Court to hear the case as soon as this week.

The White House remains focused on keeping tariffs in place no matter what, with spokesperson Kush Desai telling Yahoo Finance in a statement, "President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness."

Source: finance.yahoo

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Adam

Economic

Gold prices are posting good gains in midday U.S. trading Thursday. Silver prices are moderately up. A drop in the U.S. dollar index and a dip in U.S. Treasury yields on this day are friendly for the precious metals. August gold was last up $31.90 at $3,353.80. July silver prices were last up $0.295 at $33.45.

The marketplace is still mulling over the news that a three-judge panel from the U.S. Court of International Trade in New York on Wednesday ruled against President Trump’s sweeping “Liberation Day” tariffs. The federal court has nationwide jurisdiction over tariff and trade disputes. The ruling found that Trump exceeded his authority under the International Emergency Economic Powers Act by imposing the tariffs without congressional approval. The Trump administration filed a notice of appeal. Bottom line: A sustained loss for Trump could scramble much of his trade agenda and impact how other countries negotiate with the U.S. Traders and investors will watch this development closely and it will likely remain very fluid.

U.S. stock indexes are slightly higher at midday but have lost earlier solid gains.

The FOMC minutes from Wednesday afternoon contained no major surprises but the Wall Street Journal reported the minutes “strongly suggest the Fed isn’t close to lowering rates anytime soon.” The FOMC minutes indicated higher concerns about stagflation—slower economic growth and higher inflation.

The key outside markets today see the U.S. dollar index solidly lower. Nymex crude oil futures prices are weaker and trading around $61.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.426%.

Gold sees solid gains on weaker greenback, dip in Treasury yields_1

Technically, August gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at $3,375.00 and then at last week’s high of $3,395.30. First support is seen at $3,325.00 and then at $3,300.00. Wyckoff's Market Rating: 6.5.

Gold sees solid gains on weaker greenback, dip in Treasury yields_2

July silver futures bulls have the slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $34.015. The next downside price objective for the bears is closing prices below solid support at the May low of $31.78. First resistance is seen at $33.75 and then at $34.015. Next support is seen at $33.00 and then at $32.74. Wyckoff's Market Rating: 5.5.

Source: kitco

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Owen Li

Central Bank

US Federal Reserve (FED) Chairman Jerome Powell met with President Donald Trump at the White House today. The meeting discussed major economic developments such as economic growth, employment and inflation.

In the official statement made by the FED, it was stated that Powell did not share any expectations regarding monetary policy at the meeting, but only emphasized that the policy to be followed will depend entirely on the incoming economic data and the effects of these data on the economic outlook.

Powell also stated that he and his colleagues on the Federal Open Market Committee (FOMC) will determine monetary policy in a way that supports maximum employment and price stability, as required by law. The Fed Chairman added that all decisions will be based on careful, objective and politically neutral analysis.

Donald Trump does not like Powell's policy of high interest rates and has said on several occasions that he plans to fire Powell because of it, but has since denied that he has any such plans. Trump continues to pressure Powell to lower interest rates.

Source: CryptoSlate

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Manuel

Central Bank

Economic

The Federal Reserve said that Jerome Powell met with Donald Trump Thursday "at the president’s invitation," and the White House said the president told the central bank boss that he is making a mistake by not lowering rates.

The face-to-face encounter follows months of Powell criticism from Trump and pressure on the Fed to ease monetary policy.

The Fed said in a statement that Powell met with the president to discuss "economic developments including for growth, employment, and inflation."

Powell, according to the Fed, "did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook."

The chair said he and his colleagues on the Fed's rate-setting committee will make decisions about monetary policy "based solely on careful, objective, and non-political analysis," the Fed added in its statement.

The White House confirmed the Powell meeting, with Press Secretary Karoline Leavitt telling reporters that the Fed's summary was correct but noting that the president pushed Powell to lower rates.

"The president did say that he believes the Fed chair is making a mistake by not lowering interest rates which is putting us at an economic disadvantage to China and other countries," she said, adding Trump has been very vocal about his views publicly as well.

The encounter comes after Yahoo Finance asked Powell during a May 7 press conference why he hadn't asked for a meeting with the president amid great uncertainty about the path forward for the economy.

"I've never asked for a meeting with any president, and I never will," he said, adding that it is not up the Fed chair to seek out an audience with the occupant of the Oval Office.

"It always comes the other way: 'A president wants to meet with you,' but that hasn’t happened."

As during his first term in office, Trump has been a vocal critic of Powell, repeatedly encouraging the Fed chair to cut interest rates. Powell has urged caution and patience on rates, saying he expects Trump's tariffs to push inflation higher and drag down growth — putting the Fed in a challenging spot.

Earlier this month the central bank elected to keep its benchmark interest rate unchanged in a range of 4.25%-4.50%.

Following that meeting, Trump on social media called the central bank boss a "fool" who "doesn't have a clue." The president added during an Oval Office press conference on May 8 that he didn't plan to meet with Powell, saying, "It's like talking to a wall."

Despite harsh barbs from Trump that have included calling Powell a "major loser," the president has been clear that despite, in his view, having the authority to fire Powell, Trump has no plans to remove Powell from office.

Trump nominated Powell as Fed chair during his first term in office, and President Biden nominated Powell for a second term leading the central bank in 2021.

Powell's term as Fed chair is set to expire next May; his term on the Fed's Board of Governors runs through January 2028. Trump has held private talks with a potential replacement for Powell, former Fed governor Kevin Warsh, the Wall Street Journal reported

The Supreme Court last week went out its way to protect Fed officials from any Trump firings even as it allowed the president to remove the board members of two other independent agencies, potentially insulating Powell against any immediate pink slip from the White House.

Powell, for his part, has repeatedly stressed that his firing is not permitted by law.

The White House press secretary at Thursday's meeting between Trump and Powell that Trump did not discuss his plans for replacing Powell after his term ends or even firing Powell.

Source: Yahoo Finance

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Adam

Forex

There has been some violent moves around markets since yesterday's North-American session close.Between the misstep in Nvidia’s earnings release and renewed political tensions in the U.S, markets had plenty of fuel for volatility across the board.

The USD gapped up on the news that the US Federal Court blocked the Trump's sweeping tariff policy - though volatility induces more volatility and the dollar is now the weakest currency on the day.

Trying to make sense of these moves - USD Chart

US Dollar Seesaws After Federal Court Blocks Trump’s Tariffs_1

DXY 1H Chart, May 29, 2025

The Dollar has had some wild swings to pursue the year’s theme. The US Federal Court decision greatly appreciated the USD, supplemented with a beat in Nvidia Earnings.

US Index Futures rallied massively, and other major currencies initially took a beating. A broader theme of lack of confidence in the US led to some profit (or loss) booking of positions and the market selling this news.

As observed on the charts, the markets rejected last week's highs situated around the 100.50 level and quickly retested the 100.00 key level.

A market that has been downtrending may retest prices as a trend reverses, and this would have been a healthy gap close if the market did not reverse much further.

The DXY opened up 0.66% and is now down -0.44%.

The rejection got exacerbated by US Weekly Jobless Claims that came in weaker than expected (240K actual vs 230K exp) and other currencies are now enjoying from a break off USD Strength, with the Euro leading the charge.

Next support is at 99.20 to 99.30, about 100 pips away.

A return towards the MA 200 would eye at 99.70 and further reversal of the move down would hint at another retest of the 100.00 level.

DXY is trading around 99.45 right now and markets showed a indecision doji at the last hour.

Source: marketpulse

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Adam

Commodity

Oil declined as soft US economic data and concerns about rising supplies eroded the risk-on sentiment from a court ruling that blocked a swath of the Trump administration’s tariffs.

West Texas Intermediate fell as much as 2.1% to trade near $61 a barrel after Interfax cited Kazakhstan as saying that OPEC+ is set to hike output at a meeting on Saturday, with the size of the increase still to be decided. Broader markets eased off of earlier highs on data showing the US economy shrank at the start of the year, further pressuring the commodity.

Crude had earlier rallied after a trade court blocked a vast range of President Donald Trump’s trade levies, including elevated rates on China — the world’s top importer of crude.

“The path to sustainably higher prices remains extremely narrow,” with the market likely to struggle to absorb additional barrels from OPEC+ over the coming months, said Daniel Ghali, a commodity strategist at TD Securities. In the near term, algorithmic selling activity will weigh on prices into the weekend meeting, he added.

Oil has trended lower since mid-January on concerns about the fallout from Trump’s tariff war, with the revival of idled production by OPEC+ adding to headwinds. The trade measures have rattled global markets, raising concerns over economic growth and demand for commodities.

Elsewhere, government data released Wednesday showed that US crude inventories fell by 2.8 million barrels, less than the 4.24 million-barrel decrease seen by the industry-funded American Petroleum Institute on Tuesday. Gasoline inventories declined — along with other refined products like distillate — by 2.4 million barrels ahead of the summer driving season, offering support to prices.

Meanwhile, Libya’s eastern government said it may shut down oil production and exports in protest after a militia stormed the state oil company’s headquarters. The move highlights the persistent threat to output in the OPEC+ producer. Wildfires near major Alberta oil sand sites also threaten more than 200,000 barrels a day of Canadian production.

Source: Bloomberg

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Adam

Stocks

Stocks were mixed Thursday after a federal court ruled late Wednesday that President Donald Trump overstepped his authority to impose sweeping tariffs, throwing into chaos the administration’s core trade policy that has threatened to raise prices for businesses and slow the economy.

Investors initially cheered, but not overwhelmingly — and a morning rally lost steam on Thursday as investors assessed the potential outcome for Trump’s tariffs.

The Dow was down 240 points, or 0.58%, Thursday midday. The S&P 500 slid 0.2% and the tech-heavy Nasdaq Composite hovered around the flatline. Stocks received a boost from Nvidia’s strong earnings Wednesday, but the rally faded amid trade war uncertainty.

Gains were muted because the fate of Trump’s tariffs remains unclear. The White House immediately appealed, so the ruling may ultimately be overturned. A number of Wall Street analysts also suggested the White House could simply reclassify some of its sweeping tariffs under a different law that was not challenged in the court ruling.

“The Trump administration has other authorities it can use to impose tariffs similar to those the court struck down,” noted Alec Phillips, managing director at Goldman Sachs, in a note to investors.

Wall Street had largely moved beyond the trade war after a number of rollbacks, pauses and deals had taken much of the sting out of the tariffs that at one point early last month sent the S&P 500 into bear market territory before rallying.

“This is a positive, but it doesn’t have the same oomph as it may have in early April when the market was down,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “Investors have already been pricing in less concern about tariffs. A month ago, we might have seen a 1,000-point rally on this.”

Many stocks that had been particularly hit hard by tariffs bounced back in premarket trading before wavering during the day. Apple, Target, Nike and Crocs all rose in early hours before sliding into the red during regular trading hours.

Some traditional safe haven assets, including US Treasury bonds and gold, rallied on Thursday as investors embraced a risk-off attitude. The dollar and US crude oil fell.

And some Wall Street analysts cautioned that investors shouldn’t get too excited: The economic pain caused by tariffs remains, and Trump will almost certainly fight to maintain his signature policy.

“While Wednesday’s ruling may lift markets and the spirits of businesses and consumers concerned about the negative effects of tariffs, the uncertainty that’s starting to weigh on the economy isn’t going away,” said Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics. “The uncertainty is only over if Trump does his own surprise and accepts the decision and does not come in with tariffs under these other statutes, and I’m not giving that much credence.”