diff --git a/crates/oxc_isolated_declarations/src/declaration.rs b/crates/oxc_isolated_declarations/src/declaration.rs
index 8d675b278..d88f22604 100644
--- a/crates/oxc_isolated_declarations/src/declaration.rs
+++ b/crates/oxc_isolated_declarations/src/declaration.rs
@@ -73,7 +73,12 @@ impl<'a> IsolatedDeclarations<'a> {
             if let Some(init_expr) = &decl.init {
                 // if kind is const and it doesn't need to infer type from expression
                 if decl.kind.is_const() && !Self::is_need_to_infer_type_from_expression(init_expr) {
-                    init = Some(self.ast.copy(init_expr));
+                    if let Expression::TemplateLiteral(lit) = init_expr {
+                        init =
+                            self.transform_template_to_string(lit).map(Expression::StringLiteral);
+                    } else {
+                        init = Some(self.ast.copy(init_expr));
+                    }
                 } else {
                     // otherwise, we need to infer type from expression
                     binding_type = self.infer_type_from_expression(init_expr);
diff --git a/crates/oxc_isolated_declarations/src/inferrer.rs b/crates/oxc_isolated_declarations/src/inferrer.rs
index eb0ea0b3e..12d562afc 100644
--- a/crates/oxc_isolated_declarations/src/inferrer.rs
+++ b/crates/oxc_isolated_declarations/src/inferrer.rs
@@ -21,8 +21,13 @@ impl<'a> IsolatedDeclarations<'a> {
             Expression::NumericLiteral(_) | Expression::BigintLiteral(_) => {
                 Some(self.ast.ts_number_keyword(SPAN))
             }
-            Expression::StringLiteral(_) | Expression::TemplateLiteral(_) => {
-                Some(self.ast.ts_string_keyword(SPAN))
+            Expression::StringLiteral(_) => Some(self.ast.ts_string_keyword(SPAN)),
+            Expression::TemplateLiteral(lit) => {
+                if lit.expressions.is_empty() {
+                    Some(self.ast.ts_string_keyword(SPAN))
+                } else {
+                    None
+                }
             }
             Expression::Identifier(ident) => match ident.name.as_str() {
                 "undefined" => Some(self.ast.ts_undefined_keyword(SPAN)),
@@ -133,12 +138,12 @@ impl<'a> IsolatedDeclarations<'a> {
     }
 
     pub fn is_need_to_infer_type_from_expression(expr: &Expression) -> bool {
-        !matches!(
-            expr,
+        match expr {
             Expression::NumericLiteral(_)
-                | Expression::BigintLiteral(_)
-                | Expression::StringLiteral(_)
-                | Expression::TemplateLiteral(_)
-        )
+            | Expression::BigintLiteral(_)
+            | Expression::StringLiteral(_) => false,
+            Expression::TemplateLiteral(lit) => !lit.expressions.is_empty(),
+            _ => true,
+        }
     }
 }
diff --git a/crates/oxc_isolated_declarations/src/lib.rs b/crates/oxc_isolated_declarations/src/lib.rs
index 490261106..3b2c33e07 100644
--- a/crates/oxc_isolated_declarations/src/lib.rs
+++ b/crates/oxc_isolated_declarations/src/lib.rs
@@ -11,6 +11,7 @@ mod diagnostics;
 mod r#enum;
 mod function;
 mod inferrer;
+mod literal;
 mod module;
 mod return_type;
 mod scope;
diff --git a/crates/oxc_isolated_declarations/src/literal.rs b/crates/oxc_isolated_declarations/src/literal.rs
new file mode 100644
index 000000000..319ba4828
--- /dev/null
+++ b/crates/oxc_isolated_declarations/src/literal.rs
@@ -0,0 +1,22 @@
+use oxc_allocator::Box;
+use oxc_ast::ast::{StringLiteral, TemplateLiteral};
+
+use crate::IsolatedDeclarations;
+
+impl<'a> IsolatedDeclarations<'a> {
+    pub fn transform_template_to_string(
+        &self,
+        lit: &TemplateLiteral<'a>,
+    ) -> Option<Box<'a, StringLiteral<'a>>> {
+        if lit.expressions.is_empty() {
+            lit.quasis.first().map(|item| {
+                self.ast.alloc(self.ast.string_literal(
+                    lit.span,
+                    if let Some(cooked) = &item.value.cooked { cooked } else { &item.value.raw },
+                ))
+            })
+        } else {
+            None
+        }
+    }
+}
diff --git a/crates/oxc_isolated_declarations/src/types.rs b/crates/oxc_isolated_declarations/src/types.rs
index 8ed6e06d6..75bac7d52 100644
--- a/crates/oxc_isolated_declarations/src/types.rs
+++ b/crates/oxc_isolated_declarations/src/types.rs
@@ -189,25 +189,9 @@ impl<'a> IsolatedDeclarations<'a> {
                 "undefined" => Some(self.ast.ts_undefined_keyword(ident.span)),
                 _ => None,
             },
-            Expression::TemplateLiteral(lit) => {
-                if lit.expressions.is_empty() {
-                    lit.quasis.first().map(|item| {
-                        self.ast.ts_literal_type(
-                            SPAN,
-                            TSLiteral::StringLiteral(self.ast.alloc(self.ast.string_literal(
-                                lit.span,
-                                if let Some(cooked) = &item.value.cooked {
-                                    cooked
-                                } else {
-                                    &item.value.raw
-                                },
-                            ))),
-                        )
-                    })
-                } else {
-                    None
-                }
-            }
+            Expression::TemplateLiteral(lit) => self
+                .transform_template_to_string(lit)
+                .map(|string| self.ast.ts_literal_type(lit.span, TSLiteral::StringLiteral(string))),
             Expression::UnaryExpression(expr) => Some(
                 self.ast.ts_literal_type(SPAN, TSLiteral::UnaryExpression(self.ast.copy(expr))),
             ),
diff --git a/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts b/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts
new file mode 100644
index 000000000..875168425
--- /dev/null
+++ b/crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts
@@ -0,0 +1,10 @@
+export const CSS_VARS_HELPER = `useCssVars`
+
+export function g(func = `useCssVar`) : void {}
+
+export const F = {
+  a: `a`,
+  b: [`b`]
+} as const
+
+export const BAD = `useCssV${v}ars`
\ No newline at end of file
diff --git a/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap b/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap
new file mode 100644
index 000000000..b869fbd28
--- /dev/null
+++ b/crates/oxc_isolated_declarations/tests/snapshots/infer-template-literal.snap
@@ -0,0 +1,24 @@
+---
+source: crates/oxc_isolated_declarations/tests/mod.rs
+input_file: crates/oxc_isolated_declarations/tests/fixtures/infer-template-literal.ts
+---
+==================== .D.TS ====================
+
+export declare const CSS_VARS_HELPER = 'useCssVars';
+export declare function g(func?: string): void;
+export declare const F: {
+	readonly a: 'a';
+	readonly b: readonly ['b'];
+};
+export declare const BAD: unknown;
+
+
+==================== Errors ====================
+
+  x TS9010: Variable must have an explicit type annotation with
+  | --isolatedDeclarations.
+    ,-[10:14]
+  9 | 
+ 10 | export const BAD = `useCssV${v}ars`
+    :              ^^^
+    `----