The last legal defeat of the US President Donald Trump about duties It increases the uncertainty for US importers, while delaying the financial benefits that Haward Lutnik’s Minister of Commerce predicted that the government would bring.
The US Court of Appeal’s decision on Friday, which stated that most of Donald Trump’s duties are illegal adds a level of complexity, while challenging the President’s power to impose taxes on companies to encourage them to produce or supply what they need.
The judges allowed the maintenance of duties during the trial, threatening to freeze the investment decisions of the companies until the cost of duties is clearer.
“We know that these duties will remain in force at least until mid -October, and then Trump will probably appeal to the Supreme Court,” said Jennifer McCiun, head of Capital Economics, a world -class economist at Bloomberg Television (1.9.20). “Therefore, there can be a very long delay until we find out what is really going on.”
This time is not only created obstacles to growth, but also possible political challenges for Trump, who has preferred the speed from the substance in trade negotiations and has promised that the investment commitments that will extract in the negotiations will lead to the regeneration of the manufacturing sector. Financial markets in Asia and Europe seemed to ignore the decision on Monday, while transactions in the US were closed due to Labor Day.
“For every company working with the US, this means that no structural corporate decision will now be taken,” said Carsten Brzeski, IG’s macroeconomic leader. “While markets seem to have been inactive in terms of trade, the court’s ruling will restore uncertainty.”
Jonathan Gold, Vice -President of the supply chain and customs policy of National Retail Federation, said in a statement following the decision that “continuing volatility threatens economic growth and ultimately, and will certainly lead to higher prices for the goods and services that US consumers will pay.”
In March, Lutnik presented a scenario that Trump’s commercial policies would translate into investments that would boost construction from now on.
“From the third quarter, you will begin to feel the influence of Donald Trump and the fourth quarter will feel the power of his economy,” he told Bloomberg Television.
This initial sense of confidence has been reduced, as the implementation of duties has proved to be more difficult than expected and trade agreements with economies such as the European Union, Japan and South Korea were unclear, unprofessional structures and not integrated agreements.
Meanwhile, the US economy has not yet shown the momentum described by Lutnik almost six months ago.