A late Friday ruling by the U.S. Supreme Court declared former President Donald Trump’s tariffs illegal, prompting an immediate and defiant response from Trump, who subsequently announced a new 15% global tariff rate. The unexpected reversal in trade policy is anticipated to disproportionately benefit countries like China, India, and Brazil, who could see their competitive positions improve.
The judicial setback for Trump comes as transatlantic trade relations face further strain. The European Parliament is expected to vote on freezing the ratification of a crucial trade deal with the United States. Separately, Iceland is reportedly poised to restart talks to join the European Union as early as August, according to Politico, signaling a potential expansion of the bloc.
Economically, Germany offered a positive surprise. Business confidence in Europe’s largest economy brightened more than expected in February, with the closely watched Ifo index rising to 90.5 from 89.6 in January. The reading comfortably beat market expectations of 90, suggesting resilience amidst geopolitical uncertainties.
Market reactions were immediate and varied. European stocks traded largely flat, while Hong Kong’s Hang Seng index surged 2.5% following the Lunar New Year holidays, potentially benefiting from the U.S. tariff reversal. U.S. equity futures pointed to a negative open, with losses ranging from 0.3% to 0.5%. The U.S. dollar weakened against its main peers, as the Supreme Court’s ruling and Trump’s subsequent global tariff announcement reignited the “sell America” trade. In commodities, gold continued its upward momentum, rising 1.8% to just under $5,200 an ounce, cementing its role as a safe-haven asset.
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