Asian markets declined on Friday after a U.S. appeals court temporarily reinstated former President Donald Trump’s sweeping tariffs, creating fresh uncertainty in global trade.
The decision reversed Thursday’s market gains, which had followed a lower court ruling declaring the tariffs unconstitutional.
The renewed legal tug-of-war has spooked investors and raised concerns over global trade talks.
Although the U.S. Court of International Trade initially ruled Trump had overreached his authority in imposing many of the tariffs, the temporary stay allows them to remain in place as the legal process continues potentially all the way to the Supreme Court.
Trump condemned the original ruling on Truth Social, calling it “horrible” and warning that “backroom hustlers must not be allowed to destroy our Nation!”
In a separate case, a federal judge in Washington, D.C., found some tariffs illegal, giving the Biden administration 14 days to appeal.
The conflicting rulings have intensified speculation around U.S. trade negotiations with the EU and UK. However, Kevin Hassett, director of the National Economic Council, told Fox Business that talks were still progressing and three trade deals were nearing completion. He dismissed the legal battles as “hiccups” caused by “activist judges.”
Rodrigo Catril of National Australia Bank noted that while the courts could still side against Trump, the former president “has other avenues” to pursue tariffs, keeping his trade agenda alive.
“The only thing more certain right now is more uncertainty,” Catril said, predicting slower investment and hiring.
US Treasury Secretary Scott Bessent added that China trade negotiations were “a bit stalled” and might require direct talks between Trump and President Xi Jinping.
Global Market Reaction
Markets across Asia tumbled Tokyo (Nikkei 225): -1.2% to 37,965.10, Hong Kong (Hang Seng): -1.5% to 23,230.1, Shanghai Composite: -0.5% to 3,347.49, Seoul, Manila, Mumbai, Bangkok: All posted losses
European markets were mixed in London (FTSE 100): +0.3%, Frankfurt: Slight gains, Paris: Flat, Sydney and Wellington: Posted modest increases, Wall Street closed marginally higher the previous day, though gains were muted by disappointing economic data, including weak jobless claims, soft pending home sales, and a downwardly revised GDP contraction for Q1.
Currency & Commodities
Euro/Dollar: $1.1348 (-0.0020)
Pound/Dollar: $1.3482 (-0.0012)
Dollar/Yen: 143.81 (-0.38)
Oil (WTI): $60.74 (-0.3%)
Brent Crude: $63.96 (-0.3%)
Tokyo inflation data exceeded expectations, strengthening the yen and increasing speculation that Japan’s central bank could hike interest rates in July.
