Stocks in Asia were higher overnight as the US Court of International Trade ruled that the Trump administration did not have the authority to impose most of the tariffs that have been announced.
It said the administration had exceeded their legal authority, and that the International Emergency Economic Powers Act (IEEPA) “does not authorize the President to impose unbounded tariffs.”
The court gave the administration 10 days in order to “effectuate” the judgement — the ruling covers the 10% baseline tariffs, the 25% tariffs on Canadian and Mexican products, the extra 20% on China, as well as all the reciprocal tariffs that have been paused until 9 July.
However, there are a few exceptions not covered by the ruling, including the tariffs on steel, aluminium and automobiles.
The Nikkei (^N225) rose 1.9% on the day in Japan, while the Hang Seng (^HSI) gained 1.4% in Hong Kong. The Shanghai Composite (000001.SS) was 0.7% up by the end of the session.
The Kospi (^KS11) was also up 1.9% after the Bank of Korea delivered a 25bp rate cut overnight, in line with expectations, taking the policy rate down to 2.5%. They also cut their growth forecast for this year to 0.8%.
Across the pond on Wall Street, the S&P 500 (^GSPC) slipped 0.6%, falling back after the previous day’s 2.05% surge, and the tech-heavy Nasdaq (^IXIC) was 0.5% down. The Dow Jones (^DJI) fell 0.6%.
