In a significant legal development, a U.S. federal court has blocked President Donald Trump’s proposed “Liberation Day” tariffs, ruling that the administration overstepped its authority in applying broad import duties. The decision led to strong rallies in Asian equities and Wall Street futures, and the U.S. dollar appreciated against other safe-haven currencies.Market analysts noted that delaying or cancelling the tariffs could reduce major economic risks and boost investor confidence.
The ruling, issued on May 28, 2025, by the United States Court of International Trade, appeared to put at least a temporary pause on many of the tariffs. The Trump administration quickly appealed the decision, potentially taking the matter to the Supreme Court.
Global markets responded positively to the news. Leading stock indices in Japan, South Korea, and broader Asia saw significant gains, while European futures also climbed. In the U.S., S&P 500 and Nasdaq futures surged, further supported by strong earnings and revenue forecasts from chipmaker Nvidia.
The U.S. dollar rallied after the court ruling, climbing 0.72% against the yen, 0.63% against the Swiss franc, and pushing the dollar index back above 100 for the first time in a week. Despite this rebound, the index remains down 8% year-to-date. Analysts caution that the court ruling might not completely reverse tariffs and expect a prolonged legal battle.
Investors also focused on the U.S. bond market and the congressional budget debate, which may significantly increase national debt. Sentiment improved following Trump’s decision to delay planned 50% tariffs on EU imports, sparking hopes of better trade relations.
While the court’s decision has provided temporary relief to markets, the Trump administration’s appeal introduces uncertainty. The legal process may take time, and the outcome could have significant implications for international trade relations and economic stability.
As the situation develops, investors and policymakers will closely monitor the legal proceedings and potential impacts on global trade dynamics.
