Latest news with #EuropeanUnion
Yahoo
40 minutes ago
- Business
- Yahoo
Tariffs court fight threatens Trump's power to wield his favourite economic weapon
Since returning to power, US President Donald Trump has wielded tariffs – or the threat of them - as his economic weapon of choice. He has slapped import duties against allies and adversaries alike, and raised their rates to staggeringly high levels, only to change his mind and abruptly pause or reduce the charges. Markets and global leaders have scrambled trying to guess his next moves, while major retailers have warned of rising prices for American consumers and potentially empty shelves in shops. The president has claimed this power to impose tariffs unilaterally. He says that as president he is responding to a national economic emergency - and he cannot wait for Congress to pass legislation. In effect, this meant his finger was constantly poised on one of the most effective triggers of US economic policy. Firing off a threatening missive to a country playing hardball was as easy as posting on Truth Social (just ask the European Union, which he called "very difficult to deal with" in negotiations last week). However, late on Wednesday, the US Court of International Trade ruled that he had exceeded the authority of the emergency powers he was using. The court gave the White House 10 days to remove almost all tariffs, which it says have been imposed illegally. The White House appealed, and a federal appeals court has stayed the trade court's ruling, which means that those tariffs will stay in place - for now. The administration argued in its appeal that a ruling against Trump "would kneecap the president on the world stage, cripple his ability to negotiate trade deals, imperil the government's ability to respond to these and future national emergencies". On Thursday night, Trump was back on Truth Social, rebuking the lower court judges who had ruled against him, calling their decision "wrong" and "horrible". Trump tariffs can stay in place for now, appeals court rules What tariffs has Trump announced and why? Simon Jack: Tariff ruling doesn't really change US-UK deal Where does court ruling leave Trump's tariff agenda? Until now, the power to make or break the economy has rested on his shoulders, as the tariff rates levelled against other countries keep going up and down – seemingly according to Trump's mood. He raised the tariffs on imported Chinese goods all the way up to 145% before dropping them down to 30%. A few weeks later he used a social media post to threaten the EU with 50% tariffs, before backing down a couple of days later. Wall Street analysts have even reportedly now coined the phrase "Taco trade", referring to their belief that Trump Always Chickens Out from imposing steep import taxes. He looked furious when asked about the acronym in the Oval Office on Wednesday. "That's a nasty question" he said, arguing that it was only by making these threats that he got the EU to the negotiating table. Trump's ambassador to the EU during his first term, Gordon Sondland, told the BBC this so-called wishy-washy-ness was by design. "What Trump is doing is exactly what he would do as a business person. He would immediately find a point of leverage to get someone's attention today. Not next month, not next year... he wants to have these conversations now," he said earlier this week, before the latest legal twists. "How do you get someone as intransigent and as slow moving as the EU to do something now? You slap a 50% tariff on them and all of a sudden the phone start ringing." If Trump's tariffs plan continues to meet resistance in the courts, one option at his disposal is asking Congress to legislate the taxes instead. But that would eliminate one of his biggest tools - the element of surprise. For decades, Trump has been convinced that trade tariffs are the answer to many of America's economic problems. He has appeared to welcome the prospect of global trade war sparked by his tariff agenda, insisting that it is by raising the price of imported goods and reviving the US manufacturing sector that he will "Make America Great Again". Trump touts the money - billions of dollars, not trillions, as he says - that tariffs have already brought in to US government coffers. The president argues they will help to revive American manufacturing by persuading firms to move their factories to the US to avoid import duties. However, University of Michigan economics professor Justin Wolfers described Trump's methods as "madness". "If you believe in tariffs, what you want is for businesses to understand that the tariffs are going to... be permanent so that they can make investments around that and that's what would lead the factories to come to the United States," he told the BBC. He said that whatever happens with this court challenge, Trump has already transformed the global economic order. Prof Wolfers said while Trump "chickens out from the very worst mistakes" - citing his original 'Liberation Day' levies and the threat of 50% tariffs on the EU - he doesn't backflip on everything. The president wants to keep 10% reciprocal tariffs on most countries and 25% tariffs on cars, steel and aluminium. "Yes, he backs off the madness, but even the stuff he left in meant that we had the highest tariff rate yesterday than we'd had since 1934," Prof Wolfers said. All signs point to this being a fight that the Republican president won't give up easily. "You can assume that even if we lose, we will do it another way," Trump's trade advisor Peter Navarro said after Thursday's appeals court ruling. While the litigation plays out, America's trade partners will be left guessing about Trump's next move, which is exactly how he likes it. Trump tariffs case could head to Supreme Court as soon as Friday Faisal Islam: Tariff ruling completely changes the global trade war US trade court blocks Trump's sweeping tariffs. What happens now? Simon Jack: Tariff ruling doesn't really change US-UK deal
France 24
43 minutes ago
- Business
- France 24
Asian markets reverse as appeals court gives Trump tariffs reprieve
The losses reversed a rally across world markets the previous day as analysts warned that the legal wrangling could compound volatility and throw trade talks between Washington and other governments. While the tariffs have been stalled and are set to go through the courts -- and possibly end up at the Supreme Court -- there are expectations that the US president will find other means to implement them. The US Court of International Trade's ruling on Wednesday barred most of the tariffs announced since Trump took office, ruling that he had overstepped his authority -- a decision he labelled "horrible" and should be "quickly and decisively" reversed for good. "Backroom 'hustlers' must not be allowed to destroy our Nation!" he wrote on his Truth Social platform. A separate ruling by a federal district judge in Washington, DC also found some levies unlawful as well, giving the administration 14 days to appeal. Observers said the latest developments have led to speculation about trade negotiations, including those between the United States and European Union, and a deal it has already struck with Britain. But Kevin Hassett, director of the National Economic Council, told Fox Business that "hiccups" sparked by the decisions of "activist judges" would not affect negotiations and that three agreements were close to finalisation. National Australia Bank's Rodrigo Catril said after the appeal court decision that "Trump's trade agenda remains alive and kicking with the legal battle adding yet another layer of uncertainty". He added that the judges could still rule against the White House. "But it is probably worth emphasising that the president has other avenues to impose tariffs, so our view here is that the court case is just another layer of uncertainty/complication but it does not derail Trump's tariff agenda," Catril said. "The ongoing shift in US trade policy is creating a cloud of uncertainty and now the legal battles are making the outlook even cloudier. "The only thing that looks more certain is more uncertainty, which is set to lead to a further pullback in investment decision and hiring." Meanwhile, US Treasury Secretary Scott Bessent told Fox News on Thursday that negotiations with China were "a bit stalled" and Trump might need to speak to President Xi Jinping, weeks after the economic superpowers agreed a detente in their trade war. He added that "given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other". Hong Kong and Tokyo were off more than one percent each, while Shanghai, Sydney and Seoul also sank into the red, though Wellington and Manila edged up. The weak performance followed a tepid day on Wall Street, where all three main indexes ended just slightly higher, with sentiment also dented by data showing the US economy contracted in January-March, albeit at a slower pace than first thought. Disappointing readings on jobless benefits and pending home sales added to the more downbeat mood, with investors also on edge over elevated bond yields and Trump's plans to ramp up the budget deficit. On currency markets the yen strengthened after figures showed inflation in Tokyo -- a barometer for the rest of Japan -- came in above forecasts this month, ramping up expectations the country's central bank will hike interest rates in July. Key figures at around 0230 GMT Tokyo - Nikkei 225: DOWN 1.4 percent at 37,890.86 (break) Hong Kong - Hang Seng Index: DOWN 1.4 percent at 23,243.11 Shanghai - Composite: DOWN 0.5 percent at 3,346.41 Euro/dollar: DOWN at $1.1357 from $1.1368 on Thursday Pound/dollar: DOWN at $1.3483 from $1.3494 Dollar/yen: DOWN at 143.91 yen from 144.19 yen Euro/pound: UP at 84.24 pence from 84.22 pence
France 24
43 minutes ago
- Business
- France 24
A bad wrap: An angry Trump blasts the 'TACO Theory'
The so-called "TACO Theory" was coined by Robert Armstrong, a Financial Times writer seeking to underline the US president's tendency to backtrack on policies when they start to roil the markets. Investors have come to realize that the US administration "does not have a very high tolerance for market and economic pressure and will be quick to back off when tariffs cause pain," the journalist concluded. "This is the TACO Theory: Trump Always Chickens Out." Armstrong was writing earlier this month, after stocks had just rebounded sharply on Trump's announcement of a pause in massive tariffs imposed on the rest of the world by the Republican leader. Worsening the whiplash, Trump announced last week that tariffs of 50 percent on imports from the European Union would come into force on June 1 -- but two days later declared a pause until July 9. 'It's called negotiation' At the heart of Trump's flip-flops is an acute sensitivity for the ups and downs of market trading that he honed as a brash New York property developer and business magnate in the 1980s. During his first term in office, a sharp reaction on Wall Street could sometimes be the only way to change the billionaire's mind. Beyond the columns of the Financial Times, the "TACO Theory" is having a viral moment, and has entered the lexicon of investors who see it as more than just a snarky in-joke, according to analysts. "TACO trading strategy gets attention again," blared the headline on a podcast released Monday by John Hardy, head of macroeconomic strategy at Danish investment bank Saxo. The phrase eventually found its way back to the 78-year-old president, who furiously denied on Wednesday that he was backing down in the face of stock market turmoil. "I chicken out? I've never heard that... don't ever say what you said, that's a nasty question," the mercurial tycoon thundered, rounding in the journalist who had asked for his take on the expression. Far from caving, Trump said he was merely engaging in the high-stakes cut and thrust of international dealmaking, he snarled -- adding, with a sardonic edge: "It's called negotiation." For Steve Sosnick of Interactive Brokers, the TACO Theory is a "nonpolitical way of the markets calling the administration's bluff." Reaction Sam Burns, an analyst at Mill Street Research, told AFP he has noticed a new equanimity in Wall Street's reaction to each new tariff announcement, with traders' responses initially "much larger and more direct." Where they once convulsed markets, Trump's tariff talk now tends to be viewed as "easily reversible or not reliable," said Burns, and investors are accordingly more willing to ignore the instinct to act rashly. This new calm was evident among traders at the New York Stock Exchange who held steady in the face of Trump's EU tariff threats, and again when they did not overreact to successive court rulings blocking and then temporarily reinstating most of the tariffs. But Hardy, the Saxo analyst, warns that the vagaries of Trump's day-to-day announcements should not distract from the protectionist bent of his broader political outlook. "Trump might 'chicken out' at times," Hardy wrote in a recent commentary on Saxo's website.
Yahoo
an hour ago
- Business
- Yahoo
Asian markets reverse as appeals court gives Trump tariffs reprieve
Asian shares fell Friday after a US appeal court gave Donald Trump's sweeping tariffs a temporary reprieve, fanning uncertainty a day after judges had ruled the controversial measures were unconstitutional. The losses reversed a rally across world markets the previous day as analysts warned that the legal wrangling could compound volatility and throw trade talks between Washington and other governments. While the tariffs have been stalled and are set to go through the courts -- and possibly end up at the Supreme Court -- there are expectations that the US president will find other means to implement them. The US Court of International Trade's ruling on Wednesday barred most of the tariffs announced since Trump took office, ruling that he had overstepped his authority -- a decision he labelled "horrible" and should be "quickly and decisively" reversed for good. "Backroom 'hustlers' must not be allowed to destroy our Nation!" he wrote on his Truth Social platform. A separate ruling by a federal district judge in Washington, DC also found some levies unlawful as well, giving the administration 14 days to appeal. Observers said the latest developments have led to speculation about trade negotiations, including those between the United States and European Union, and a deal it has already struck with Britain. But Kevin Hassett, director of the National Economic Council, told Fox Business that "hiccups" sparked by the decisions of "activist judges" would not affect negotiations and that three agreements were close to finalisation. National Australia Bank's Rodrigo Catril said after the appeal court decision that "Trump's trade agenda remains alive and kicking with the legal battle adding yet another layer of uncertainty". He added that the judges could still rule against the White House. "But it is probably worth emphasising that the president has other avenues to impose tariffs, so our view here is that the court case is just another layer of uncertainty/complication but it does not derail Trump's tariff agenda," Catril said. "The ongoing shift in US trade policy is creating a cloud of uncertainty and now the legal battles are making the outlook even cloudier. "The only thing that looks more certain is more uncertainty, which is set to lead to a further pullback in investment decision and hiring." Meanwhile, US Treasury Secretary Scott Bessent told Fox News on Thursday that negotiations with China were "a bit stalled" and Trump might need to speak to President Xi Jinping, weeks after the economic superpowers agreed a detente in their trade war. He added that "given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other". Hong Kong and Tokyo were off more than one percent each, while Shanghai, Sydney and Seoul also sank into the red, though Wellington and Manila edged up. The weak performance followed a tepid day on Wall Street, where all three main indexes ended just slightly higher, with sentiment also dented by data showing the US economy contracted in January-March, albeit at a slower pace than first thought. Disappointing readings on jobless benefits and pending home sales added to the more downbeat mood, with investors also on edge over elevated bond yields and Trump's plans to ramp up the budget deficit. On currency markets the yen strengthened after figures showed inflation in Tokyo -- a barometer for the rest of Japan -- came in above forecasts this month, ramping up expectations the country's central bank will hike interest rates in July. - Key figures at around 0230 GMT - Tokyo - Nikkei 225: DOWN 1.4 percent at 37,890.86 (break) Hong Kong - Hang Seng Index: DOWN 1.4 percent at 23,243.11 Shanghai - Composite: DOWN 0.5 percent at 3,346.41 Euro/dollar: DOWN at $1.1357 from $1.1368 on Thursday Pound/dollar: DOWN at $1.3483 from $1.3494 Dollar/yen: DOWN at 143.91 yen from 144.19 yen Euro/pound: UP at 84.24 pence from 84.22 pence West Texas Intermediate: DOWN 0.3 percent at $60.74 per barrel Brent North Sea Crude: DOWN 0.3 percent at $63.97 per barrel New York - Dow: UP 0.3 percent at 42,215.73 (close) London - FTSE 100: DOWN 0.1 percent at 8,716.45 (close) dan/pst
Hindustan Times
an hour ago
- Business
- Hindustan Times
A bad wrap: An angry Trump blasts the 'TACO Theory'
President Donald Trump made no pretense at hiding his irritation this week when he was asked by a reporter about "TACO" an acronym that has been gaining traction among Wall Street traders who believe that "Trump Always Chickens Out." The so-called "TACO Theory" was coined by Robert Armstrong, a Financial Times writer seeking to underline the US president's tendency to backtrack on policies when they start to roil the markets. Investors have come to realize that the US administration "does not have a very high tolerance for market and economic pressure and will be quick to back off when tariffs cause pain," the journalist concluded. "This is the TACO Theory: Trump Always Chickens Out." Armstrong was writing earlier this month, after stocks had just rebounded sharply on Trump's announcement of a pause in massive tariffs imposed on the rest of the world by the Republican leader. Worsening the whiplash, Trump announced last week that tariffs of 50 percent on imports from the European Union would come into force on June 1 but two days later declared a pause until July 9. At the heart of Trump's flip-flops is an acute sensitivity for the ups and downs of market trading that he honed as a brash New York property developer and business magnate in the 1980s. During his first term in office, a sharp reaction on Wall Street could sometimes be the only way to change the billionaire's mind. Beyond the columns of the Financial Times, the "TACO Theory" is having a viral moment, and has entered the lexicon of investors who see it as more than just a snarky in-joke, according to analysts. "TACO trading strategy gets attention again," blared the headline on a podcast released Monday by John Hardy, head of macroeconomic strategy at Danish investment bank Saxo. The phrase eventually found its way back to the 78-year-old president, who furiously denied on Wednesday that he was backing down in the face of stock market turmoil. "I chicken out? I've never heard that... don't ever say what you said, that's a nasty question," the mercurial tycoon thundered, rounding in the journalist who had asked for his take on the expression. Far from caving, Trump said he was merely engaging in the high-stakes cut and thrust of international dealmaking, he snarled adding, with a sardonic edge: "It's called negotiation." For Steve Sosnick of Interactive Brokers, the TACO Theory is a "nonpolitical way of the markets calling the administration's bluff." Sam Burns, an analyst at Mill Street Research, told AFP he has noticed a new equanimity in Wall Street's reaction to each new tariff announcement, with traders' responses initially "much larger and more direct." Where they once convulsed markets, Trump's tariff talk now tends to be viewed as "easily reversible or not reliable," said Burns, and investors are accordingly more willing to ignore the instinct to act rashly. This new calm was evident among traders at the New York Stock Exchange who held steady in the face of Trump's EU tariff threats, and again when they did not overreact to successive court rulings blocking and then temporarily reinstating most of the tariffs. But Hardy, the Saxo analyst, warns that the vagaries of Trump's day-to-day announcements should not distract from the protectionist bent of his broader political outlook. "Trump might 'chicken out' at times," Hardy wrote in a recent commentary on Saxo's website. "But the underlying policy moves are for real, and a deadly serious shift in US economic statecraft and industrial policy that is a response to massive instabilities that have been growing for years." rle-tmc/ft/sla
