A federal appellate court momentarily halted a decision made by the Court of International Trade that had prevented much of the extensive tariffs imposed by the Trump administration against various international trade partners. This legal move reintroduced ambiguity, leading to further selling activities in U.S. equity markets. Nonetheless, European markets experienced an uptick during Friday’s afternoon session even with this reversal still in effect.
This ruling grants the White House extra time to justify the legality of the president’s moves to alter international trade policies. Government representatives indicated that similar levels of tariff increases might be reinstated using different legal grounds. However, imposing duties through other parts of the Trade Act may require several months.
“I can confirm to the American public that the Trump tariff plan remains robust, vigorous, and will be enforced to safeguard you, preserve your employment, and maintain your industries, as well as prevent the transfer of our wealth into foreign control,” stated Peter Navarro, President Trump’s chief trade advisor, on Thursday.
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Trump had invoked the International Emergency Economic Powers Act (IEEPA) to impose the so-called reciprocal tariffs announced in early April. However, on Wednesday, the trade court ruled that the president does not have the authority to impose such broad levies under the IEEPA.
America won’t be able to operate properly if President Trump—or any other president, for that matter—has his critical diplomatic or trade discussions derailed by activist judges,” stated White House Press Secretary Karoline Leavitt. “In the end, the responsibility falls on the Supreme Court to halt this practice for the preservation of both our Constitution and nation.
The opening of Wall Street sees declines as European markets show gains.
The US stock markets began the day lower on Friday afternoon even though they had initially risen following an initial court decision. By around 15:30 Central European Summer Time, the Dow Jones Industrial Average had dropped by 0.34%, the S&P 500 decreased by 0.39%, and the Nasdaq Composite Index went down by 0.60%.
On Friday, European markets showed gains with the Euro Stoxx 50 climbing by 0.54%, Germany’s DAX increasing by 0.95%, and France’s CAC 40 advancing by 0.32% as of 13:30 CEST. However, investors remain vigilant regarding the development of U.S.-EU trade negotiations, complicated further by ongoing legal disputes over the tariffs imposed during the previous presidential term under President Trump.
In early trading on Friday, most Asian stock markets experienced declines. The Hang Seng Index in Hong Kong dipped by 1.4%, the Nikkei 225 in Japan decreased by 1.39%, and the Kospi in South Korea went down by 0.61%. However, at 03:10 CET, the Australian ASX 200 remained relatively unchanged.
The US dollar declines as safe-haven assets gain strength
Recent judicial updates have further eroded investors’ trust in U.S. financial instruments, notably the dollar. Initially, yields on American sovereign debt rose to 4.5%, before retreating slightly to 4.42%. This fluctuation occurred amid fresh strain on Treasury values.
In the meantime, safe-haven assets have experienced a rally. Gold surged upward, with the euro, Swiss franc, and Japanese yen all appreciating notably. Following the suspension of the tariff decision on Thursday, the euro saw a sharp recovery from its intra-day lows against the U.S. dollar. By early Friday at 03:11 CET, the EUR/USD exchange rate had risen from a dip down to 1.1210 earlier in the day to reach 1.1353. Similarly, gold futures escalated, jumping up to $3,321 per ounce following an interday trough of $3,269 on Thursday.
