Shares Rise After Court Halts Trump Tariffs

By Stefan J. Bos, Chief International Correspondent Worthy News

SYDNEY/JAKARTA (Worthy News) – Asian shares and Wall Street futures jumped in Asia on Thursday after a U.S. federal court blocked President Donald J. Trump’s “Liberation Day” tariffs from going into effect, sending the dollar up on safe-haven currencies.

The little-known Manhattan-based Court of International Trade ruled that Trump overstepped his authority by imposing across-the-board duties on imports from nations that sell more to the United States than they buy.

The White House quickly appealed the decision and could take it to the Supreme Court if needed, but traders and analysts said it offered “hope” that Trump might back away from the highest tariffs.

The S&P 500 Futures jumped 1.6%, while Nasdaq 100 Futures rallied as much as 2% on aftermarket gains in tech stocks. That trading suggested significant shares could further rise when the U.S. stock market opens later in the day.

Analysts also suggested that the court ruling could increase uncertainty over Trump’s tariffs and encourage investors to return to stocks.

“It’s long been suggested that the emergency powers Trump has used to implement tariffs were unconstitutional and that the power to enact tariffs sits with Congress,” said Kyle Rodda, a senior financial analyst at online trading platform Capital.com.

TRADE DEALS UNDERMINED?

“Should the markets get their way, the courts could delay and then deny these tariffs, removing one massive risk and undoubtedly stoking risk appetite,” Rodda stressed in published remarks.

Capital Economics analysts added that “The ruling will obviously throw into disarray the administration’s push to quickly seal trade “deals” during the 90-day pause from tariffs that have now been declared to be illegal.”

The U.S. dollar rallied following the court’s order, surging against currencies such as the euro, yen, and the Swiss franc in particular.

There was less cheering within the Trump administration as the ruling, if it stands, blows a giant hole through the president’s strategy to use steep tariffs to wring concessions from trading partners.

“It creates deep uncertainty around multiple simultaneous negotiations with the European Union, China and many other countries,” commented Reuters news agency.

Trump has promised Americans that the tariffs would bring manufacturing jobs back to U.S. shores and shrink a $1.2 trillion U.S. goods trade deficit, among his central campaign promises.

NO LEVERAGE?

Analysts said that without the instant leverage provided by tariffs of 10% to 54% or higher, the Trump administration would have to find new forms of leverage or take a slower approach to negotiations with trading partners.

However, “The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” the three-judge panel said in the decision to issue a permanent injunction on the blanket tariff orders issued by Trump since January.

“That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it,” they explained.

The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel, and aluminum using a different statute.

The decisions of the Manhattan-based Court of International Trade, which hears disputes involving international trade and customs laws, can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and ultimately the U.S. Supreme Court.

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