President Donald Trump suffered a stunning setback when a federal court ruled he lacked the legal authority to unilaterally impose sweeping tariffs, but the political impact may not be so negative.
Both the stock market and Trump’s job approval ratings took a hit after the “Liberation Day” tariffs announcement in April. But Trump’s poll numbers have bounced back since then, and U.S. stock market futures received a boost from the court ruling.
The polling slide was halted after some tariffs were paused and others were reassured the Trump administration was primarily using them as a negotiating tool for trade deals that could ultimately open foreign markets to American goods. Trump’s political recovery cannot be entirely attributed to Republican-leaning pollsters.
Now the two biggest second-term initiatives that have created political headaches for Trump, the Elon Musk-led Department of Government Efficiency and the tariffs, could both become lower-profile.
While Musk vowed on Wednesday that the DOGE “mission will only strengthen over time as it becomes a way of life throughout the government,” he also said goodbye to his special government employee status and politely thanked Trump for letting him tackle wasteful spending. It wasn’t the only time Musk appeared to take a bow.
“I think I probably did spend a bit too much time on politics,” Musk told Ars Technica. “It’s less than people would think, because the media is going to overrepresent any political stuff, because political bones of contention get a lot of traction in the media. It’s not like I left the companies. It was just relative time allocation that probably was a little too high on the government side, and I’ve reduced that significantly in recent weeks.”
Less helpfully, Musk took a few shots on his way out the door at the House-passed One Big Beautiful Bill for not being DOGE-y enough in its approach to spending.
As Trump’s top second-term legislative priority remained in limbo, the courts once again were a thorn in his side on what to him may be his most important policy objective of all: his big, beautiful tariffs.
But the Democrats’ anti-Trump political strategy has depended heavily on DOGE or the tariffs blowing up in the president’s face. Time will tell, but both look less likely after Wednesday.
Trump and his team probably don’t see it that way, especially on tariffs. They immediately appealed the decision of the U.S. Court of International Trade and will likely look for other statutory grants of power to impose tariffs.
The White House can point to some concessions and promises of foreign investment obtained since the tariffs were announced. What this ruling will do to ongoing trade negotiations is unclear, but the Trump administration has presented its policies as key to bringing jobs and manufacturing capacity back to the United States.
“The primary components of the Trump economic agenda — trade, tax cuts, and deregulation — are not standalone policies,” Treasury Secretary Scott Bessent has argued. “They are interlocking parts of an engine designed to drive long-term investment in the American economy.”
In April, inflation cooled to its lowest level in more than four years. With more carefully targeted tariffs in place during Trump’s first term, many consumer prices remained stable. The annual inflation rate in 2020, Trump’s last full year in office during his previous stint in the White House, was 1.23%.
Maybe Trump will find a way to restore his full tariffs. Or perhaps this ruling will slow the momentum of either the administration’s trade talks or the extension of the tax cuts as the reconciliation bill heads to the Senate, where some Republicans are wary of the budget deficit projections and overall price tag.
But at the beginning of May, there were fears of a recession. Those worries had cooled somewhat before the oft-delayed tariffs were put on hold judicially.
When these fears have been kept at bay, Trump has often been as popular as he has been at any point in his near-decade atop national politics. While Trump will do everything in his power to bring back the tariffs and implement some of the DOGE cuts, it is possible that these short-term setbacks won’t be political losses for him at all.
Is there such a thing as a Pyrrhic defeat?
