Celebrate the allegedly significant setback inflicted on Trump's customs tariff policy
Stock Markets Anticipate Uptick following Tariff Invalidation
In a rare victory for the global markets, a U.S. federal court has declared President Trump's global tariffs as invalid. The ruling, issued on May 28, 2025, stated that Trump exceeded his legal authority under the International Emergency Economic Powers Act (IEEPA) by imposing these tariffs.
This development comes as a breath of fresh air for the volatile markets, with initial gains observed in Asian markets and expectations of similar upward trends in Europe. The U.S. federal court's decision has provided a significant boost, particularly for tech giants. Nvidia, for instance, experienced a nearly 5 percent increase in its stock price following the announcement of its quarterly results, which surpassed expectations.
U.S. index futures have risen overnight, with the DAX futures gaining nearly 300 points. Indices in Tokyo and Seoul have similarly seen a rise of up to 1.8 percent. The U.S. International Trade Court's ruling has cast doubt on the legality of the tariffs, but it remains uncertain how this will unfold as the Trump administration has immediately appealed the ruling.
Stephen Innes of SPI Asset Management described the positive market reaction as "a sigh of relief after weeks of volatility due to the trade war." He further acknowledged that the court's ruling signifies "a structural turning point in the narrative - from strongman decisions to an institutionalized framework."
For Charu Chanana, chief investment strategist at Saxo Markets, the ruling serves as "a symbolic blow against Trump's aggressive trade agenda." Despite the relief, it's important to note that the final word on tariffs has not yet been spoken. The impact is already evident in Korea, where the central bank has cut interest rates and revised its economic outlook, albeit within the context of the previous tariff environment.
With no major corporate earnings scheduled and attention shifting towards the revision of GDP in the U.S., as well as speeches by various Fed speakers and the release of retail sales and consumer data in Europe, the focus remains on the evolving trade policy landscape.
[1] U.S. Court of International Trade ruling, May 28, 2025[2] U.S. District Court for the District of Columbia ruling, May 29, 2025
- Amidst the positive market response, the Commission might be urged to expedite its proposal for a directive on the protection of workers from the potential financial risks arising from increased business activities following the tariff invalidation in electronic communications networks.
- The sweeping consequences of the U.S. District Court for the District of Columbia's ruling, which upheld the lower court's decision invalidating the tariffs, could potentially be felt in the realm of politics, where public opinion and campaign finance could shift in response to the market's improvement and economic recovery.
