Introduction: Dollar and stocks decline after US Supreme Court hits Trump’s tariffs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
We’re in a new phase of trade war uncertainty, after the supreme court blocked Donald Trump’s sweeping global tariffs last Friday.
With the president hitting back over the weekend, announcing a new temporary global tariff of 10%, then 15%, its clear that the White House is persisting with its policy of using trade levies to gain leverage over other countries.
So, as ING economists warn:
Announcements since the Supreme Court’s ruling strongly confirm that Trump has no intention of removing his “most beautiful word” from the English dictionary.
Uncertainty is back, and given the latest muscle-flexing by European leaders, the risk of escalation is now higher than it was a year ago.
The market reaction has been to sell the US dollar – it has fallen by 0.4% against a basket of other currencies today, adding to losses on Friday after the supreme court declared tariffs imposed under the International Emergency Economic Powers Act to be illegal.
US stock market futures are lower too, indicating we’ll see losses on Wall Street, while bitcoin has also weakened.
Last night, US Trade Representative Jamieson Greer insisted that deals made with other countries are still intact, and should be honoured.
Greer told CBS’s Face the Nation:
“We want them to understand these deals are going to be good deals.
“We’re going to stand by them. We expect our partners to stand by them.”
Greer also pledged that the new 15% global tariff was distinct from the bilateral agreements struck in the last nine months with about 20 countries.
That indicates that the deal announced by Trump and the UK prime minister, Keir Starmer, in May last year will continue to stand, rather than the UK’s tariff rising to 15%.
Although, as education secretary, Bridget Phillipson admitted on Sunday, UK businesses faced “uncertainty” after the latest developments.
The agenda
-
9am GMT: German IFO investor confidence survey
-
11am GMT: Bank of England policymaker Alan Taylor giving a Fireside chat at Deutsche Bank
-
Noon GMT: Mexico’s Q4 2025 GDP report
-
1.30pm GMT: The Chicago Fed National Activity Index
-
3pm GMT: US factory orders for December
Key events
FTSE 100 opens lower
The London stock market has dipped slightly in early trading.
The FTSE 100 index is down 19 points, or 0.18%, at 10,668 points.
That’s despite a rally in precious metal producers (following the jump in gold and silver this morning) and miners (as the weaker dollar lifts commodity prices).
Gold hits three-week high
Gold has jumped to a three-week high, as the uncertainty over US trade policy drives investors into safe-haven assets.
Gold is up by 0.6% to $5,135 an ounce, its highest level since the end of January.
Silver is up 1.2% to its highest level in over two weeks.
Australia’s stock market drops but Hong Kong rallies
Asia-Pacific stock markets have already reacted to the latest tariff developments.
Australia’s stock market has dropped by 0.6%, as investors recognise that the new 15% global tariff will hurt its exporters.
But with mainland Chinese markets closed for the lunar new year, Hong Kong’s Hang Seng index has surged by 2.4%.
That follows analysis (see here) showing that China is one of the countries who should benefit most from the new global tariff.
Tony Sycamore, market analyst at IG, explains:
Even after President Trump’s swift response—announcing a new 10% global tariff (quickly raised to 15%) under Section 122 of the Trade Act of 1974, effective February 24, the net tariff on Chinese goods is still lower than it was before the Court ruling. Most estimates suggest that China will see a net reduction in tariffs of roughly 5–8 percentage points versus the pre-ruling IEEPA peak.
While it’s good news for China, the news isn’t so good for Australia, as Australia’s effective US tariff rate on many of its exports is rising from a 10% baseline to 15%—a 50% relative increase under the new temporary global surcharge announced by President Trump.
Bitcoin down 2.8%
This latest bout of trade war uncertainty has not helped the bitcoin price
Bitcoin is down 2.8% today at $65,734, having earlier dropped below $65k for the first time in two weeks.
US stock market futures down
US stock futures show that the S&P 500 share index is on track to drop by 0.55% when trading resumes in New York.
The narrower Dow Jones Industrial Average index is being called down 0.45%, while the tech-focused Nasdaq futures contract is down 0.65%.
Matt Britzman, senior equity analyst Hargreaves Lansdown:
Wall Street ended last week on a high after the Supreme Court struck down the Trump administration’s use of its preferred tariff powers, with investors quickly repricing the outlook for lower effective tariff rates.
That optimism is fading somewhat this morning, however, with US futures pointing lower as the dust settles and investors strap back in for another wave of tariff uncertainty.
Chinese commerce ministry is urging Washington to lift its tariffs, saying it is making a “full assessment” of the supreme court’s tariff ruling.
The ministry argued that the US unilateral tariffs are not in the interests of any party, adding:
“There are no winners in a trade war and…protectionism leads nowhere.”
China, India and Brazil ‘benefit most’ from new trade regime
Donald Trump’s new 15% flat-rate tariff is a boost for China, India and Brazil, according to analysis from Global Trade Alert, a trade monitoring body.
Global Trade Alert have calculated that the shift away from the tariff regime before the supreme court ruling produces “clear winners and losers” among the top 20 exporters to the US.
Countries that faced steep IEEPA surcharges see large tariff reductions: Brazil (-13.6 pp), China (-7.1 pp), and India (-5.6 pp) benefit most, since the flat S122 surcharge replaces country-specific IEEPA rates that were far higher.
[S122 refers to section 122 of the US Trade Act of 1974, the legislation Trump is using for his new 15% tariffs].
US customs agency to stop collecting tariffs deemed illegal by Supreme Court on Tuesday
The US Customs and Border Protection agency said it will halt collections of tariffs imposed under the International Emergency Economic Powers Act at 12:01 a.m. EST (0501 GMT) on Tuesday, after the supreme court declared them illegal on Friday.
CBP has told shippers through a message on its Cargo Systems Messaging Service that it will de-activate all tariff codes associated with President Donald Trump’s prior IEEPA-related orders as of Tuesday.
With the dollar selling off, the pound has gained almost half a cent to $1.3523.
The euro’s up a similar amount, to $1.1822.
Introduction: Dollar and stocks decline after US Supreme Court hits Trump’s tariffs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
We’re in a new phase of trade war uncertainty, after the supreme court blocked Donald Trump’s sweeping global tariffs last Friday.
With the president hitting back over the weekend, announcing a new temporary global tariff of 10%, then 15%, its clear that the White House is persisting with its policy of using trade levies to gain leverage over other countries.
So, as ING economists warn:
Announcements since the Supreme Court’s ruling strongly confirm that Trump has no intention of removing his “most beautiful word” from the English dictionary.
Uncertainty is back, and given the latest muscle-flexing by European leaders, the risk of escalation is now higher than it was a year ago.
The market reaction has been to sell the US dollar – it has fallen by 0.4% against a basket of other currencies today, adding to losses on Friday after the supreme court declared tariffs imposed under the International Emergency Economic Powers Act to be illegal.
US stock market futures are lower too, indicating we’ll see losses on Wall Street, while bitcoin has also weakened.
Last night, US Trade Representative Jamieson Greer insisted that deals made with other countries are still intact, and should be honoured.
Greer told CBS’s Face the Nation:
“We want them to understand these deals are going to be good deals.
“We’re going to stand by them. We expect our partners to stand by them.”
Greer also pledged that the new 15% global tariff was distinct from the bilateral agreements struck in the last nine months with about 20 countries.
That indicates that the deal announced by Trump and the UK prime minister, Keir Starmer, in May last year will continue to stand, rather than the UK’s tariff rising to 15%.
Although, as education secretary, Bridget Phillipson admitted on Sunday, UK businesses faced “uncertainty” after the latest developments.
The agenda
-
9am GMT: German IFO investor confidence survey
-
11am GMT: Bank of England policymaker Alan Taylor giving a Fireside chat at Deutsche Bank
-
Noon GMT: Mexico’s Q4 2025 GDP report
-
1.30pm GMT: The Chicago Fed National Activity Index
-
3pm GMT: US factory orders for December