Introduction: Trump tariffs blocked by US court in New York
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
A federal court in the US has blocked Donald Trump from imposing sweeping trade tariffs under an emergency powers law.
A three-judge panel at the court of international trade argued that Trump has exceeded his authority, left US trade policy dependent on his whims and unleashed economic chaos.
The court wrote:
The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.
…The court does not pass upon the wisdom or likely effectiveness of the president’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.
There are reports that the Trump administration has filed a notice of appeal. White House officials have already publicly challenged the court’s authority n the case. A White House spokesperson told Reuters that it was “not for elected judges to decide how to properly address a national emergency”.
News that Trump’s tariffs may be unlawful was welcomed by stock markets in Asia. In Japan the Nikkei 225 index rallied by 1.9%, while in China the SSE Composite rose by 0.8% and Hong Kong’s Hang Seng rose by 1.1%. The South Korean Kospi index rallied by 1.8%.
In the UK, the blue chip FTSE 100 index is also poised to rise when markets open at 8am, with futures up 0.82%.
The agenda
-
9:30AM BST: ONS estimates of inflation for different household types
-
1:30PM BST: Second reading of US GDP
-
1:30PM BST: US weekly jobless claims
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It “will take a reserve power in the Pension Schemes Bill to set binding asset allocation targets” for investments in private makets, the Treasury said on Thursday. It will also secure £27.5bn for “local investment priorities” for Local Government Pension Scheme authorities.
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The government also confirmed plans to pool multiple pension funds into bigger ‘megafunds’ which manage £25bn or more in assets. It aims to consolidate the 86 administering LGPS authorities into six pools.
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The Labour government has been reviewing ways to overhaul the private pension system. In May, Reeves ruled out mandating that pension funds must allocate money to British assets, after 17 pension bosses signed up to a voluntary agreement to invest at least 5% of their assets in UK private markets.
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Stock markets across Europe are rallying this morning as investors wake up to news that a trade court in New York has blocked Trump’s “liberation day” tariffs.
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The UK’s FTSE 100 blue chip index has ticked up 0.1%, while the German Dax rallied 0.9%. France’s CAC 40 has risen 1%.
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The court in the US was not asked to address some industry-specific Trump has issued on cars, steel and aluminium under a different statute.
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But analysts at Deutsche Bank think if the court ruling is upheld, Trump could pursue his other tariffs through the same means. They wrote:
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n
If the ruling did remain in place, preventing the use of tariffs under IEEPA, one option for the administration would be to expand the use of other tariff instruments, like the Section 232 on national security grounds, which have been used for autos, steel and aluminium tariffs.
n
But this is clearly a setback for their tariff strategy, and it’s also going to complicate its current attempts to negotiate concessions from trading partners, given the possibility the tariffs might not come into force once the 90-day extension period is over.
n
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Even with the court action, Trump’s trade policies could still affect other big economies, analysts are warning.
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Alec Phillips, an analyst at the investment bank Goldman Sachs, wrote:
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n
This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major U.S. trading partners.
n
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Trump has claimed authority to set trade tariffs under the International Emergency Economic Powers Act, or “IEEPA”. The law has historically been used to impose sanctions on enemies of the US or freeze their assets. Trump is the first US president to use it to impose tariffs.
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But the Court of International Trade, which is in New York, has said the US Constitution gives Congress exclusive authority to regulate commerce with other countries, and that is not overridden by the president’s emergency powers.
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It has been busy in the US overnight. Elon Musk has said he will leave his role in the Trump administration.
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As my scheduled time as a Special Government Employee comes to an end, I would like to thank President @realDonaldTrump for the opportunity to reduce wasteful spending.
The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government.
— Elon Musk (@elonmusk) May 29, 2025
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The billionaire boss of Tesla has played a leading role at the department of government efficiency, or “DOGE”. His 130-day mandate as a special government employee in the Trump administration was set to expire about 30 May.
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He had already been signalling his departure from Washington and a commitment to refocus on his businesses. He also criticised Trump’s new tax bill, calling it too expensive and a measure that would undermine his work to make the government more efficient.
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Hopes that tariffs might be blocked has helped lift stocks in Asia, but there is likely to be much more uncertainty ahead, analysts say.
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Prashant Newnaha, senior Asia-Pacific rates strategist, at TD Securities, said:
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n
The knee-jerk reaction for equities to rally and bond yields to back up on the tariff pause makes sense.
n However, with tariffs now in the appeal process and likely heading to the Supreme Court, uncertainty is back. Expect to see this lead to delays in investment and hiring. The pause also puts tariff revenue at risk which could bring deficit issues back on the radar.n
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Meanwhile Gary Ng, senior economist at Natixis, says:
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n
The decision will fuel temporary risk-on sentiment in equities and lower bond yields as the market dials back inflation expectations driven by tariffs.
n
However, this is not the end of the tariff story. There is no clarity as the legal battle will continue and it does not change the fact that Trump will find ways to reshape global trade order.
n
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Yunosuke Ikeda, head of macro research at Nomura, said:
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n
At this point it’s almost impossible to know if the tariffs will be completely unwound by this. But in the hypothetical situation that they are, it’s natural to see dollar appreciation.
n
Basically Trump’s tariffs will lead to stagflation pressure on the U.S. economy, so reversing those tariffs would be a positive for the dollar.
n
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
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A federal court in the US has blocked Donald Trump from imposing sweeping trade tariffs under an emergency powers law.
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A three-judge panel at the court of international trade argued that Trump has exceeded his authority, left US trade policy dependent on his whims and unleashed economic chaos.
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The court wrote:
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n
The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.
n
…The court does not pass upon the wisdom or likely effectiveness of the president’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.
n
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There are reports that the Trump administration has filed a notice of appeal. White House officials have already publicly challenged the court’s authority n the case. A White House spokesperson told Reuters that it was “not for elected judges to decide how to properly address a national emergency”.
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News that Trump’s tariffs may be unlawful was welcomed by stock markets in Asia. In Japan the Nikkei 225 index rallied by 1.9%, while in China the SSE Composite rose by 0.8% and Hong Kong’s Hang Seng rose by 1.1%. The South Korean Kospi index rallied by 1.8%.
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In the UK, the blue chip FTSE 100 index is also poised to rise when markets open at 8am, with futures up 0.82%.
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The agenda
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- n
- n
9:30AM BST: ONS estimates of inflation for different household types
- n
1:30PM BST: Second reading of US GDP
- n
1:30PM BST: US weekly jobless claims
n
n
n
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Key events
Please turn on JavaScript to use this feature
Investors are watching the US dollar, which is currently up 0.1% against a basket of leading currencies and is one of the top performers in the G10 forex market today, says Kathleen Brooks, a research director at the broker XTB.
Sell the dollar was one of the biggest ‘tariff trades’, so now that tariffs are in jeopardy, an unwind of this position is to be expected.
However, for now, the focus is on a recovery in USD/JPY, and losses in the euro and the pound vs. the dollar have been minimal so far.
Rachel Reeves to push big pension funds to back British assets
Elsewhere, the UK government has said it will require the biggest pension funds in the country to invest in British assets.
It “will take a reserve power in the Pension Schemes Bill to set binding asset allocation targets” for investments in private makets, the Treasury said on Thursday. It will also secure £27.5bn for “local investment priorities” for Local Government Pension Scheme authorities.
The government also confirmed plans to pool multiple pension funds into bigger ‘megafunds’ which manage £25bn or more in assets. It aims to consolidate the 86 administering LGPS authorities into six pools.
The Labour government has been reviewing ways to overhaul the private pension system. In May, Reeves ruled out mandating that pension funds must allocate money to British assets, after 17 pension bosses signed up to a voluntary agreement to invest at least 5% of their assets in UK private markets.
Davos founder launches criminal complaint against accusers, according to a report from the Financial Times.
Klaus Schwab, the founder of the World Economic Forum, has reportedly launched a criminal complaint against the whistleblowers whose accusations led to his ousting.
Schwab founded the WEF in 1971 but stepped down in April after the board launched an investigation after whistleblowers reportedly accused him of manipulating research, using company funds to pay for private massages, and asking junior staff to withdraw thousands of dollars on his behalf.
The Financial Times reports this morning that Schwab said he would fight the “stupid and constructed” allegations, and that his lawyers had filed a complaint for defamation and coercion with the public prosecutor in Switzerland.
European markets rally after Trump tariff ruling
Stock markets across Europe are rallying this morning as investors wake up to news that a trade court in New York has blocked Trump’s “liberation day” tariffs.
The UK’s FTSE 100 blue chip index has ticked up 0.1%, while the German Dax rallied 0.9%. France’s CAC 40 has risen 1%.
Tariffs are dominating the headlines this morning but some of the market optimism has also come from Nvidia, which reported its first quarter results last night.
The chip designer, which has been at the heart of the AI spending boom, reported a 69% surge in revenue to $44.1bn in its quarter ended on 27 April, higher than expected.
The ompany has projected revenue of $45bn in the second quarter, meeting analyst forecasts even as it said that restriction on shipments of AI chips to China would cost it $8bn in sales.
Shares in Nvidia were up 4.9% in after-hours trading.
Tariffs on autos, steel and aluminium remain in place
The court in the US was not asked to address some industry-specific Trump has issued on cars, steel and aluminium under a different statute.
But analysts at Deutsche Bank think if the court ruling is upheld, Trump could pursue his other tariffs through the same means. They wrote:
If the ruling did remain in place, preventing the use of tariffs under IEEPA, one option for the administration would be to expand the use of other tariff instruments, like the Section 232 on national security grounds, which have been used for autos, steel and aluminium tariffs.
But this is clearly a setback for their tariff strategy, and it’s also going to complicate its current attempts to negotiate concessions from trading partners, given the possibility the tariffs might not come into force once the 90-day extension period is over.
Court ruling might not change final outcome for big US trading partners, says Goldman analyst
Even with the court action, Trump’s trade policies could still affect other big economies, analysts are warning.
Alec Phillips, an analyst at the investment bank Goldman Sachs, wrote:
This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major U.S. trading partners.
Trump has claimed authority to set trade tariffs under the International Emergency Economic Powers Act, or “IEEPA”. The law has historically been used to impose sanctions on enemies of the US or freeze their assets. Trump is the first US president to use it to impose tariffs.
But the Court of International Trade, which is in New York, has said the US Constitution gives Congress exclusive authority to regulate commerce with other countries, and that is not overridden by the president’s emergency powers.
Musk announces he will leave his role in Trump administration
It has been busy in the US overnight. Elon Musk has said he will leave his role in the Trump administration.
As my scheduled time as a Special Government Employee comes to an end, I would like to thank President @realDonaldTrump for the opportunity to reduce wasteful spending.
The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government.
— Elon Musk (@elonmusk) May 29, 2025
“}}”>
As my scheduled time as a Special Government Employee comes to an end, I would like to thank President @realDonaldTrump for the opportunity to reduce wasteful spending.
The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government.
— Elon Musk (@elonmusk) May 29, 2025
The billionaire boss of Tesla has played a leading role at the department of government efficiency, or “DOGE”. His 130-day mandate as a special government employee in the Trump administration was set to expire about 30 May.
He had already been signalling his departure from Washington and a commitment to refocus on his businesses. He also criticised Trump’s new tax bill, calling it too expensive and a measure that would undermine his work to make the government more efficient.
Investors say stock markets will rally but ‘not the end of the tariff story’
Hopes that tariffs might be blocked has helped lift stocks in Asia, but there is likely to be much more uncertainty ahead, analysts say.
Prashant Newnaha, senior Asia-Pacific rates strategist, at TD Securities, said:
The knee-jerk reaction for equities to rally and bond yields to back up on the tariff pause makes sense.
However, with tariffs now in the appeal process and likely heading to the Supreme Court, uncertainty is back. Expect to see this lead to delays in investment and hiring. The pause also puts tariff revenue at risk which could bring deficit issues back on the radar.
Meanwhile Gary Ng, senior economist at Natixis, says:
The decision will fuel temporary risk-on sentiment in equities and lower bond yields as the market dials back inflation expectations driven by tariffs.
However, this is not the end of the tariff story. There is no clarity as the legal battle will continue and it does not change the fact that Trump will find ways to reshape global trade order.
Yunosuke Ikeda, head of macro research at Nomura, said:
At this point it’s almost impossible to know if the tariffs will be completely unwound by this. But in the hypothetical situation that they are, it’s natural to see dollar appreciation.
Basically Trump’s tariffs will lead to stagflation pressure on the U.S. economy, so reversing those tariffs would be a positive for the dollar.
Introduction: Trump tariffs blocked by US court in New York
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
A federal court in the US has blocked Donald Trump from imposing sweeping trade tariffs under an emergency powers law.
A three-judge panel at the court of international trade argued that Trump has exceeded his authority, left US trade policy dependent on his whims and unleashed economic chaos.
The court wrote:
The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.
…The court does not pass upon the wisdom or likely effectiveness of the president’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.
There are reports that the Trump administration has filed a notice of appeal. White House officials have already publicly challenged the court’s authority n the case. A White House spokesperson told Reuters that it was “not for elected judges to decide how to properly address a national emergency”.
News that Trump’s tariffs may be unlawful was welcomed by stock markets in Asia. In Japan the Nikkei 225 index rallied by 1.9%, while in China the SSE Composite rose by 0.8% and Hong Kong’s Hang Seng rose by 1.1%. The South Korean Kospi index rallied by 1.8%.
In the UK, the blue chip FTSE 100 index is also poised to rise when markets open at 8am, with futures up 0.82%.
The agenda
-
9:30AM BST: ONS estimates of inflation for different household types
-
1:30PM BST: Second reading of US GDP
-
1:30PM BST: US weekly jobless claims
