A Federal appeals court temporarily blocked a ruling from the Court of International Trade that barred most of the Trump administration’s sweeping tariffs on global trading partners. The legal development reignited uncertainty, sparking renewed sell-offs in US stock markets. However, European markets rose on Friday afternoon despite the reinstatement.
The decision provides the White House with additional time to defend the legality of the president’s efforts to reshape global trade relations. Federal officials signalled that the same level of import levies could be reintroduced under alternative legal authorities, although enacting tariffs via other sections of the Trade Act could take several months.
“I can assure the American people that the Trump tariff agenda is alive, well, healthy and will be implemented to protect you, to save your jobs and your factories, and to stop shipping foreign wealth — our wealth — into foreign hands,” Peter Navarro, Trump’s top trade adviser, said on Thursday.
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 cannot function if President Trump — or any other president, for that matter — has their sensitive diplomatic or trade negotiations railroaded by activist judges,” said White House Press Secretary Karoline Leavitt. “Ultimately, the Supreme Court must put an end to this for the sake of our Constitution and our country.”
Wall Street opens lower as European markets rise
US stock markets opened lower on Friday afternoon despite jumping on the original court ruling. As of 15:30 CEST, the Dow Jones Industrial Average was down 0.34%, while the S&P 500 fell 0.39%, and the Nasdaq declined 0.60%.
European markets, however, were higher on Friday with the Euro Stoxx 50 up 0.54%, Germany’s DAX up 0.95% and France's CAC 40 rising 0.32% by 13:30 CEST. Investors will be closely watching the progress of US-EU trade talks, though the legal battle surrounding the Trump administration’s tariffs is adding complexity to the outlook.
Asian equity markets traded mostly lower on Friday morning. Hong Kong’s Hang Seng Index fell 1.4%, Japan’s Nikkei 225 lost 1.39%, and South Korea’s Kospi dropped 0.61%. Australia’s ASX 200 was flat as of 03:10 CEST.
The US dollar tumbles as haven assets rise
The latest court developments have once again dented investor confidence in US assets, particularly the dollar. Yields on US government bonds initially jumped to 4.5% but later pulled back to 4.42% as Treasury prices came under renewed pressure.
Meanwhile, haven assets have rallied. Gold jumped, and the euro, the Swiss franc, and the Japanese yen all strengthened significantly. The euro rebounded sharply from an intraday low against the dollar on Thursday after the tariff ruling was paused. The EUR/USD pair fell as low as 1.1210 before surging to 1.1353 as of 03:11 CEST on Friday. Gold futures also swung higher, climbing to $3,321 per ounce from an intraday low of $3,269 on Thursday.
