Asian shares and US futures jump after court rules against Trump's sweeping tariffs
Asian shares have advanced and U.S. futures jumped after a federal court blocked President Donald Trump from imposing sweeping tariffs on imports under an emergency-powers law.
The court found the 1977 International Emergency Economic Powers Act, which Trump has cited as his basis for ordering massive increases in import duties, does not authorize the use of tariffs.
A three-judge panel ruled on several lawsuits arguing Trump exceeded his authority, casting doubt on trade policies that have jolted global financial markets, frustrated trade partners and raised uncertainty over the outlook for inflation and the global economy. The Trump administration filed an appeal, and it was unclear if the White House will respond to the ruling by pausing all of its emergency power tariffs in the interim.
Many of Trump's double-digit tariff hikes are paused for up to 90 days to allow time for trade negotiations, but the uncertainty over their eventual outcome has stymied businesses and left consumers wary about what lies ahead.
'Just when traders thought they'd seen every twist in the tariff saga, the gavel dropped like a lightning bolt over the Pacific,' Stephen Innes of SPI Asset Management said in a commentary.
The ruling was, at the least, 'a brief respite before the next thunderclap.'
The future for the S&P 500 was up 1.6% while that for the Dow Jones Industrial Average gained 1.2%.
Japan's Nikkei 225 index jumped 1.5% to 38,263.36. American's largest ally in Asia has been appealing to Trump to cancel the tariffs he has ordered on imports from Japan and to also stop 25% tariffs on steel, aluminum and autos.
The ruling also pushed the dollar sharply higher against the Japanese yen. It was trading at 146.06 yen early Thursday, up from 144.87 yen late Wednesday.
Australia's S&P/ASX 200 gained 0.3% to 8,418.90.
In South Korea, which like Japan relies heavily on exports to the U.S., the Kospi surged 1.4% to 2,707.77. Shares also were helped by the Bank of Korea's decision to cut its key interest rate to 2.5% from 2.75%, to ease pressure on the economy.
On Wednesday, U.S. stocks cooled, with the S&P 500 down 0.6% at 5,888.55. It's still within 4.2% of its record after charging higher amid hopes that the worst of the turmoil caused by Trump's trade war may have passed. It had been roughly 20% below the mark last month.
The Dow industrials lost 0.6% to 42,098.70, and the Nasdaq composite fell 0.5% to 19,100.94.
Trading was relatively quiet in the countdown to Wednesday's main event for financial markets, the latest quarterly earnings release for Nvidia. That came after trading ended for the day. Before that, the AI darling's stock slipped 0.5%. It jumped 4.9% in after-hours trading.
Like Nvidia, Macy's stock also swung up and down through much of the day, even though it reported milder drops in revenue and profit for the latest quarter than analysts expected. Its stock ended the day down 0.3%.
Several other retailers likewise delivered better-than-expected results for the latest quarter. Abercrombie & Fitch soared 14.7% after its profit and revenue topped analysts' expectations. CEO Fran Horowitz credited broad-based growth across its business around the world, and strength for its Hollister brand offset weakness for its Abercrombie brand.
Dick's Sporting Goods added 1.7% after topping analysts' expectations for the latest quarter, and it stood by its financial forecasts it earlier gave for the full year.
The yield on the 10-year Treasury rose to 4.47% from 4.43% late Tuesday.
The bond market showed relatively little reaction after the Federal Reserve released the minutes from its latest meeting earlier this month, when it left its benchmark lending rate alone for the third straight time. The central bank has been holding off on cuts to interest rates, which would give the economy a boost, amid worries about inflation staying higher than hoped because of Trump's sweeping tariffs.
In other dealings early Thursday, U.S. benchmark crude oil gained 60 cents to $62.44 per barrel. Brent crude, the international standard, added 56 cents to $64.88 per barrel.
The euro slipped to $1.1239 from $1.1292.
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AP Business Writers Matt Ott and Stan Choe contributed.
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Norman Kachuck stood on a loamy ridge overlooking his inheritance. Avocado trees blanketed the hillsides of ACA Groves in three directions, just a portion of a 372-acre spread studded with 16,000 specimens, many of them dense with branches weighed down by that quintessential California fruit. The serene San Diego County property felt far from the chaotic epicenter of the global avocado industry in Mexico. Violence, corruption and environmental degradation have saturated the avocado trade there, causing the U.S. to briefly stop imports and senators to agitate for action by the federal government. "Mexican avocado imports are tainted conflict fruit," said Kachuck, 70, a former neurologist who heads his family's business. "The Mexican avocado industry is corrupt and ungoverned — and the American consumer is being deceived." A deluge of inexpensive avocados from Mexico has imperiled the livelihoods of California growers, Kachuck among them. A quirky and voluble man, Kachuck is on a quest to save the California avocado, taking political and legal action against entrenched interests he sees as an impediment to farmers like him. He calls himself a "Neuroavocado Warrior." "You've got to be an activist, you've got to be proactive and you have to defend your strengths and buttress your weaknesses in everything you do," said Kachuck, a married father of three adult children. "Everything has adversarial components to it. But the operative part is making peace." As recently as the 1990s, the U.S. did not import Mexican avocados. But 1994's North American Free Trade Agreement opened the floodgates: now roughly 90% of the avocados consumed here are imported. And the bulk of that fruit — again, roughly 90% — comes from Mexico, according to the U.S. Department of Agriculture. At the same time, Southern California farmers must survive in a drought-prone state, and extreme weather brought on by climate change has meant irregular crop yields, among other challenges. Dylan Marschall, a real estate broker who specializes in avocado properties, said the market dynamics are brutally simple: "Yeah, California has better-quality avocados, but retailers are in the business to make money. And if they can get [better] prices from Mexico, they aren't going to pay for California fruit." Amid the tumult, Kachuck has battled with the California Avocado Commission, accusing it of insufficiently aiding growers. Now he is bracing for President Trump's trade policies, unsure what they might do to his business. Kachuck said he would welcome a tariff, but pointed out that another major Trump initiative — deporting millions of immigrants in the U.S. illegally — could seriously deplete his and other farmers' labor forces. Change can't come soon enough. Kachuck's line of credit is tapped out and he's had to draw hundreds of thousands of dollars from his retirement account to keep the business afloat. Amid the avalanche of foreign fruit, the seasons spanning 2019 through 2023 were "just awful," Kachuck said. The COVID-19 pandemic amplified the problems. But he presses on. "Yeah, I'm taking chances. And I'm stupid enough to not know when quitting is correct," he said. "I just have this general sense of optimism — or hubris — that I can figure it out." Kachuck took over his family's business in 2010, making the long drive to San Diego County from his home in Valley Village. He had just walked away from a career in medicine — he'd practiced as a neurologist at USC for 20 years — to aid his ailing father. Israel Kachuck, a onetime astronautics engineer and general contractor, bought more than 450 acres of mostly barren land in the 1960s and began planting avocado trees. "He had been a restless soul for as long as I was aware," Kachuck said. "lt was part and parcel with what he was doing: moving things around in his brain to accommodate problem solving that was interesting and remunerative." The son had a similar wandering spirit. "My avocado did not fall too far from the tree," Kachuck acknowledged. He studied music composition and briefly played keyboard — three days in 1976 — with the Pointer Sisters. He then moved to New York to compose music for a girlfriend's dance company until his curiosity about how the brain works led him to neurology. Next came medical school, graduating from USC in 1987. When he got involved in ACA Groves about 15 years ago, his dad was grateful. "For the first time in his life, he was finally sharing the business with somebody," Kachuck said. Before long, though, Israel was diagnosed with Alzheimer's disease. He died in 2021 at 92. Though he'd been addled by the ailment, he understood that his son had managed to preserve the family business. "The saving of the family legacy was a very important obligation I felt," said Kachuck, who added, with a laugh, that he had also hoped the business would ensure his children "had more than just a neurologist's income to support their lifestyles." Kachuck immersed himself in a wide-ranging education in avocados, from their agronomy to the unlikely backstory of their California triumph. Once known as the alligator pear, the avocado traces its history to southern Mexico, where the fruit, according to some experts, was first cultivated about 5,000 years ago. (In Nahuatl, avocado is ahuacatl, sometimes defined as "testicle.") Though it is not native to California, the avocado is arguably as tied to the state's identity as the orange once was. This is thanks to the venerable Hass variety, discovered in the 1920s by a Pasadena mail carrier-turned-grower, Rudolph Hass. His namesake variety accounts for 95% of avocados consumed in the U.S. The proliferation of Mexican and other Latin cuisines cemented the avocado's position as an American staple — largely via guacamole. But the fruit hit some speed bumps on its path to ubiquity. Amid an obsession with low-fat diets in the 1980s, avocados were spurned by many — even though their fats are mostly unsaturated. Enter: the California Avocado Commission, which is overseen by the California Department of Food and Agriculture and whose main responsibility is to market and promote the state's fruit. In the 1990s, the commission — which is funded by an assessment of the gross dollar value of California avocados sold — invested in research to establish the fruit's health efficacy, said avocado farmer Duane Urquhart, a commission board member at the time. Once the avocado's nutritiousness was established, Urquhart said, the commission launched a marketing and education campaign to teach consumers how to use them, even working with cooking schools to develop recipes. "That," he said, "was when we really created the U.S. market for California avocados." Now praised as a superfood, avocados are at turns revered and vilified. Consider the endless disparaging of millennials over their avocado toast. But that hasn't stopped anyone from eating them. The avocado's rise had an unintended consequence: Business interests in Mexico took notice. As inexpensive Mexican avocados flooded the state, many California growers looked to the avocado commission for help. But Kachuck felt its board of directors made major missteps. In late 2020, an agricultural trade attorney advised the commission's board that it could petition the United States International Trade Commission for import relief, which can include tariffs. Such a complaint, the attorney said, could prompt an investigation and have a "chilling effect on foreign competitors," recalled avocado farmer John Cornell, then a board member. But the avocado commission never took action. Writing in the commission's "From the Grove" publication in 2023, the board's then-chairman, Rob Grether, derided what he termed "fanciful fixes for foreign fruit flow." The California avocado industry's retail and food-service partners would oppose such efforts, he wrote. Kachuck was incredulous: "There was so much information about malfeasance in the Mexican avocado industry." Complicating matters were competing interests. Though many California growers complained about Mexican imports, some of their peers had avocado groves or related businesses in Mexico too. Other issues pitted farmers in the north — Santa Barbara, San Luis Obispo and Ventura counties — against those south in San Diego and Riverside. This all came to a head when Growing Coachella Valley, a nonprofit advocacy group, asked the commission in 2021 to support California legislation that sought to hold imported agriculture to state health and environmental standards. But the commission's board never even voted on whether to support the legislation. According to minutes from a board meeting, a staff member said he and legal counsel determined that AB 710 was not in the commission's "best interest" in part because it would put the group in "a precarious position" with important retailers. Kachuck fumed. In February 2024, he called out the commission's board of directors at its meeting in Oxnard: "You betrayed my trust, that of our avocado growing community, and as well that of the American consumer." The California Avocado Commission did not respond to multiple interview requests; instead, a staff member referred The Times to minutes from its board meetings. Kachuck's comments at the Oxnard meeting galvanized a loose coalition of other unhappy growers, most of them in the San Diego area. They decided to fight the issue through the 2024 board election, with six seats up for grabs on a body composed of 20 members and alternates. Kachuck believed the election presented a realistic opportunity to shake up the commission. He sent out mailers and posted a get-out-the-vote appeal on the website of American Avocado Farmers, a group he and other growers formed last year. But only 14% of eligible voters cast ballots, Kachuck said, and just one of the candidates he and a handful of like-minded farmers had backed was elected. "It's awful," he said. "I'm spending money I don't have — it's borrowed money. At this point I am 80% through my retirement account." Kachuck's failure at the ballot box may stem in part from the geographical divide. In addition to comparatively plentiful and inexpensive water, northern farmers enjoy another advantage: a later summer harvest, which means their fruit is picked after the Mexican crop has inundated the market. The Southern California avocado harvest roughly coincides with that flood. Some farmers wonder if the gulf between the northern and southern poles of the industry is so wide that each region might be better served by having its own commission. Others are gearing up for a different vote: Every five years, the state's food and agriculture department holds a referendum that allows growers to decide whether the commission should continue to serve them. The next one will be held in spring 2026, a department spokesman said. And then there is the big elephant in the boardroom: President Trump's on-again, off-again tariffs. Kachuck pivoted to a new strategy in the meantime: In February, he and three other farmers sued Fresh Del Monte Produce, Calavo Growers and Mission Produce in federal court, alleging they violated the California Business and Professions Code by falsely marketing their avocados as "sustainably and responsibly sourced" when they actually come from Mexican orchards planted on deforested land. Jennifer Church, attorney for the plaintiffs, said that the case "is really about the American public being misled to the detriment of our local farmers." Fresh Del Monte, Calavo and Mission did not respond to requests for comment. But this month the companies filed a joint motion to dismiss the growers' lawsuit, arguing in part that the challenged statements are typical "corporate puffery," a legal term for exaggerated marketing claims that may not be objectively factual but are generally permissible. The fight over California's avocado industry has become Kachuck's focus — to the detriment of other pursuits. There are things he wishes he could work on, like cultivating the Reed avocado, a little-known variety that's about the size and shape of a grapefruit. "It's the most luscious, creamy, large and delicious avocado I've ever tasted," he said. He maintains 50 Reed trees, but doesn't sell the fruit, instead giving it away to friends and family. The Reed, Kachuck said, spoils quickly after being picked, but could be made hardier via genetic intervention, such as cross-breeding. Kachuck was in his element showing off the Reed trees during a visit to ACA Groves, taking obvious pleasure in the ranch's pastoral tableau. He crunched across alluvial soil in scuffed sneakers. A gust of wind turned an avocado tree into a viridescent blur. "I would love to concentrate on making a better avocado for us," Kachuck said. He noted that Reed avocados have something unique going for them: They are not commercially grown in Mexico. At least not yet. Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
