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We’ve come to an interesting crossroads wherein the scope of Trump’s capacity for norm-bending will be given its ultimate test: Whether or not he ignores the courts to push ahead with his “Liberation Day” tariffs.
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A key U.S. federal court has recently ruled the Trump admin’s wide-sweeping tariffs were invalid, given the President’s myriad actions weren’t protected by emergency power laws enacted by Trump.
Laws that he believed – or perhaps not – did allow him to do such a thing.
But here, the situation is interesting because Trump doesn’t really have any actual economic or social policies apart from (seemingly unending) tariffs.
So really, his whole entire political deal has just been knocked off its feet. For now.
Sure, he’s against anything “woke,” but that seems to reflect a global fascination with the kinds of issues once reserved for first-year university students, and doesn’t really possess anything necessarily Trumpian in itself. Conservative backlashes are, once you look back, older than the steam engine.
What is almost definite: Right now, there are lawyers in some suite somewhere in the White House, or perhaps somewhere offside a golf course, burning the midnight oil as I write this.
As of Thursday afternoon, when it comes to a response from the White House, it’s eerily quiet.
The big question is: Will the American President abide by this ruling?
That’s unfortunately a decent question, given he’s already shown a flagrant enthusiasm for ignoring court requests to return deported immigrants, which unfortunately, seems to be getting swept under the rug by constant economic news.
(Maybe that’s the point.)
Futures liking the news
News of the court’s decision swept across the globe on Thursday, Australian time, and that’s not surprising, given that there is a poetic element to Trump being stopped by his own country.
NASDAQ futures were up +2% at 3pm on Thursday; the S&P500 is set to pop +1.5%.
Maybe most telling is CME Group’s futures product for the Russell 2000 smallcap index shows it’s set to jump +2.6% – a sign, perhaps, that smaller investors are bullish; not just algos and bankers.
It doesn’t take a psychologist to realise Trump, the human being, isn’t going to be enjoying this hit the news. It also doesn’t take a savant to realise any kind of flagrant subversion of the US legal system will probably send futures back in the other direction.
It’s also unfortunate timing for Donny, as a trade court effectively ruled his April 2 tariff regime illegal, within the same week a new acronym has started doing the rounds – ‘Trump Always Chickens Out,’ or TACO. One brave journalist asked him about that new nickname, and copped a spray for it.
HotCopper editor Isaac McIntyre and I discussed TACO and Trump’s latest stumblings in this week’s HotCopper Wire podcast. As of 3.30pm AEST, Trump hadn’t come out swinging on Truth Social, or Twitter.
There, his last post was resharing the thoughts of an analyst who really wants the Fed to cut rates. Make of that what you will.
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