HONG KONG: Asian shares fell Friday (May 30) after a US appeal court gave Donald Trump’s sweeping tariffs a temporary reprieve, fanning uncertainty a day after judges had ruled the controversial measures were unconstitutional.
The losses reversed a rally across world markets the previous day as analysts warned that the legal wrangling could compound volatility and throw trade talks between Washington and other governments.
While the tariffs have been stalled and are set to go through the courts – and possibly end up at the Supreme Court – there are expectations that the US president will find other means to implement them.
The US Court of International Trade’s ruling on Wednesday barred most of the tariffs announced since Trump took office, ruling that he had overstepped his authority – a decision he labelled “horrible” and should be “quickly and decisively” reversed for good.
“Backroom ‘hustlers’ must not be allowed to destroy our Nation!” he wrote on his Truth Social platform.
A separate ruling by a federal district judge in Washington, DC also found some levies unlawful as well, giving the administration 14 days to appeal.
Observers said the latest developments have led to speculation about trade negotiations, including those between the United States and European Union, and a deal it has already struck with Britain.
But Kevin Hassett, director of the National Economic Council, told Fox Business that “hiccups” sparked by the decisions of “activist judges” would not affect negotiations and that three agreements were close to finalisation.
National Australia Bank’s Rodrigo Catril said after the appeal court decision that “Trump’s trade agenda remains alive and kicking with the legal battle adding yet another layer of uncertainty”.
He added that the judges could still rule against the White House.
“But it is probably worth emphasising that the president has other avenues to impose tariffs, so our view here is that the court case is just another layer of uncertainty/complication but it does not derail Trump’s tariff agenda,” Catril said.
“The ongoing shift in US trade policy is creating a cloud of uncertainty and now the legal battles are making the outlook even cloudier.
“The only thing that looks more certain is more uncertainty, which is set to lead to a further pullback in investment decision and hiring.”
