While everyone’s calling yesterday a disaster for Trump’s trade agenda, I’m seeing the setup for his biggest victory yet. Here’s why losing in court might be exactly what he needed…
A Day of Devastating Headlines That Could Become Strategic Gold
Yesterday was supposed to be a nightmare for Trump’s trade agenda. First, Wall Street coined “TACO trade” (Trump Always Chickens Out) to mock his tariff flip-flopping. Then, hours later, a federal trade court delivered what appeared to be a knockout blow—ruling that Trump’s sweeping tariffs were illegal and blocking their enforcement.
But here’s what the headlines miss: Trump may have just been handed the perfect setup for his strongest position yet. What looks like defeat could become the catalyst for unprecedented trade authority that no court could ever touch.
The “Devastating” Court Ruling: Actually Good News?
Yesterday’s ruling by the U.S. Court of International Trade didn’t just slap Trump’s wrist—it delivered a categorical rejection of his legal foundation. The three-judge panel ruled that “the Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” effectively wiping out most of the tariff regime Trump put in place since taking office.
What’s Blocked vs. What Remains
The court ruling creates a clear distinction that Trump can exploit strategically:
BLOCKED (under emergency powers):
- 30% tariffs on China
- 25% tariffs on goods from Mexico and Canada (fentanyl-related)
- 10% universal tariffs on most goods coming into the United States
- All “Liberation Day” reciprocal tariffs
STILL IN EFFECT (under different legal authority):
- 25% tariffs on autos, auto parts, steel or aluminum, which were subject to Section 232 of the Trade Expansion Act
This split gives Trump the perfect narrative: Emergency powers aren’t enough—he needs proper Congressional backing. Why This Might Be the Best Thing That Happened to Trump’s Trade Agenda
First, the legal landscape is far from settled. A Florida federal judge recently reached the opposite conclusion, citing 1970s precedent from Yoshida v. Nixon that gives presidents broad tariff authority under emergency powers. With conflicting federal rulings, this is exactly the type of case destined for Supreme Court resolution—and Trump’s team has strong arguments about trade deficits constituting genuine national emergencies.
But more importantly, yesterday’s timing couldn’t be more perfect.
Enter the “One Big Beautiful Bill”
Here’s where Trump’s famous deal-making instincts could turn apparent disaster into strategic triumph. The House just passed Trump’s massive “One Big Beautiful Bill” by a razor-thin 215-214 margin, but it’s headed to the Senate where it will be revised. White House officials are already selling the bill to deficit hawks by claiming Trump’s tariffs will provide steady revenue to offset the package’s estimated $3 trillion cost.
Yesterday’s court ruling just gave Trump the perfect justification to add explicit tariff authority to the bill.
Think about it: Republicans can now argue they’re not expanding presidential power—they’re clarifying Congressional intent after judicial confusion. They’re giving Trump the tools he needs while maintaining Constitutional authority over trade. And they’re making the revenue projections that justify their tax cuts legally bulletproof.
The Multi-Track Strategy
Trump doesn’t have to choose between legal appeals and legislative action—he can pursue both simultaneously:
Track 1: Aggressive Appeals
- File immediate emergency stay to pause the injunction
- Fast-track through Federal Circuit to Supreme Court
- Strong precedent arguments about presidential emergency powers
- National security justifications for trade deficit concerns
Track 2: Legislative Backup
- Add comprehensive tariff authority to Senate version of budget bill
- Frame as Congressional clarification, not expansion of power
- Tie directly to revenue needs for tax cut package (current projections show $2.7 trillion over 2026-35)
- Create authority no court could challenge
Track 3: Strategic Narrative
- Position as defending Congressional prerogatives against judicial overreach
- Emphasize national security and economic security arguments
- Use “TACO trade” criticism to show need for clear, stable authority
There are other tariff mechanisms that could be deployed but these take time.
Why This Could Work Brilliantly
The beauty of this approach is that each track reinforces the others:
Political Pressure: Having legislative action moving puts pressure on courts to allow existing authority while Congress acts—courts hate creating constitutional crises.
Legal Precedent: Supreme Court victory would establish broad presidential trade powers for future use.
Constitutional Clarity: Congressional authorization respects separation of powers while giving Trump maximum flexibility.
Revenue Certainty: Makes tariff revenue projections for tax cuts legally ironclad, helping pass the broader package.
Market Stability: J.P. Morgan has already lowered GDP forecasts to 1.6% due to trade policy uncertainty—Congressional backing would eliminate volatility.
The Foreign Policy Chess Game
Yesterday’s ruling creates an interesting dynamic for America’s trading partners. The smart money says most countries will pause negotiations, waiting to see if Trump’s authority gets restored or neutered. This seems logical—why make concessions to a president whose trade powers are in legal limbo?
But this conventional wisdom might be backwards. Countries that move quickly to cut deals while Trump is weakened could be getting in on the ground floor of the greatest trade authority expansion in decades.
Think about it: If Trump emerges with Congressional backing, he’ll have tools that are legally bulletproof and politically unassailable. The countries that helped him get early wins during his moment of weakness will be remembered favorably. Those that waited for “clarity” may find themselves facing a much stronger negotiating position later.
The EU’s recent delay of 50% tariffs until July 9 suggests some understand this dynamic. Rather than celebrating Trump’s legal troubles, they’re buying time to cut a deal before his position potentially becomes unshakeable.
The “Everything Bagel” Advantage
The “One Big Beautiful Bill” is what one observer called “something of an everything bagel, a package well-stuffed with items large and small.” It includes tax cuts, border security, energy provisions, and Medicaid changes—representing potentially “the entirety of his legislative agenda this year and next.”
This gives Trump enormous leverage. Senators who might hesitate about tariff authority alone will find it harder to oppose when it’s bundled with tax cuts for their constituents, border security funding, and energy projects for their states.
The bill already has nearly 1,000 organizational endorsements. Adding tariff authority could actually strengthen support by providing the revenue stream that makes the math work.
Learning from the TACO Trade
Yesterday’s “TACO trade” confrontation—where Trump was asked about Wall Street’s belief that he “always chickens out” on tariffs—revealed something important. Trump’s angry reaction showed this criticism hits a nerve. Getting permanent Congressional authority would eliminate any perception of weakness while giving him tools that are actually stronger than emergency powers.
Congressional authorization can’t be easily challenged in court, doesn’t depend on proving national emergencies, and provides stable authority that markets can price in without the volatility that created “TACO trade” opportunities.
Instead of relying on contested emergency powers that courts can second-guess, Trump could emerge with explicit Congressional authorization for comprehensive trade tools. Instead of revenue projections based on legally questionable tariffs, Republicans could point to Congressional backing for their math. Instead of market volatility from uncertain authority, businesses would face predictable trade policy backed by both branches.
The court ruling that appeared to “bring the administration’s trade war to a screeching halt” might actually accelerate congressional action that makes Trump’s trade agenda unstoppable.
The Rabbit and the Hat
Here’s the magic trick: What looks like Trump’s biggest setback could become the catalyst for his strongest position ever.
Immediate: Emergency stay request to pause court ruling Short-term: Senate revision of “One Big Beautiful Bill” with tariff provisions Medium-term: Supreme Court review of presidential trade powers Long-term: Ironclad legislative foundation for aggressive trade policy maybe mixed in with some other tariff mechanisms.
The next few weeks will show whether Trump’s team recognizes the opportunity hiding in yesterday’s apparent defeat. If they execute this multi-track strategy correctly, they could turn yesterday’s worst tariff news day in months into the foundation for the strongest trade authority any president has wielded in decades.
Sometimes the best magic tricks happen when everyone thinks they’ve caught the magician.
For companies in this time of uncertainty I would not pause your tariff work. Continue to build resiliency in your supply chains that will serve you well in the short and long term.
