Markets Watch Trump Trade Fallout after Supreme Court Tariff Blow
Global markets are bracing for renewed volatility as U.S. President Donald Trump steps up rhetoric on trade after the Supreme Court struck down his emergency tariff powers, raising uncertainty over existing agreements with key partners.
The ruling dealt a significant blow to Trump’s trade agenda, prompting warnings from the president that foreign governments should not «play games» by revisiting deals negotiated under the now-invalid tariffs. The issue is expected to dominate his upcoming State of the Union address, where he may also criticise the court’s decision.
The legal setback has left U.S. allies seeking clarity. Japan is reportedly asking whether preferential terms agreed last year will still apply, while Taiwan has sought assurances that previously negotiated benefits will remain in place.
Trade tensions also escalated in Asia, where China announced restrictions on exports of dual-use items to 20 Japanese entities, citing concerns over Tokyo’s alleged military ties. The move underscores how geopolitical frictions continue to shape the trade landscape.
Despite the political drama, Asian markets reacted relatively calmly. Major benchmarks in Japan and China rose after reopening from holidays, supported in part by the prospect of lower U.S. tariffs following the court ruling. Gains were also driven by strength in the artificial intelligence supply chain, lifting markets in Taiwan and South Korea.
European futures signalled a mixed open, with modest gains in continental indices while UK markets lagged slightly. Investors are also watching corporate earnings and economic data, including French business confidence and a UK government bond auction.
Analysts say the next major test will be Trump’s address later on Tuesday, which could shape market expectations around future trade policy and determine whether the tariff setback leads to a broader recalibration of US economic strategy.
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