SYDNEY — Asian shares and Wall Street futures jumped in Asia on Thursday after a US federal court blocked President Donald 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 all the way to the Supreme Court if needed, but in the meantime it offered some hope that Trump might back away from the highest tariff levels he had threatened.
“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 Capital.com.
“Should the markets get their way, the courts could delay and then deny these tariffs, removing one massive risk and undoubtedly stoking risk appetite.”
It could also encourage US trading partners to stall any trade negotiations they are having with the White House while waiting to see how the case is resolved.
“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,” said Paul Ashworth, chief North America economist at Capital Economics.
“Other countries will wait and see whether a higher court is willing to reverse this ruling.”
Investors reacted by embracing equities and Japan’s Nikkei quickly rose 1.7 percent, while South Korean shares gained 1.2 percent to a nine-month top.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.3 percent, while Chinese blue chips firmed 0.5 percent.
