Tariff uncertainty persists despite US Supreme Court ruling

US tariffs Supreme Court ruling: New trade policy framework emerges

UBS On-Air: Paul Donovan Daily Audio 'Welcome back uncertainty'

The desk interprets the recent commentary from UBS, emphasizing that increased trade policy uncertainty poses significant risks to currency valuations. The Supreme Court's ruling against certain IEEPA tariffs, while anticipated, sets a perplexing backdrop with President Trump's more sweeping universal tariffs, rising unexpectedly from 10% to 15%. Per the full note [source], the absence of specific details about exemptions or the implications for revised trade agreements adds to the volatility that traders must navigate in the coming sessions.

State of US tariffs

The desk is focused on the implications of the impending expiration of the 10% global tariff in July, as detailed by HSBC’s Shanella Rajanayagam. Per the full note, the expiration could prompt shifts in US trade policy that may affect currency valuations and trading positions. The economic landscape surrounding tariffs is complex, as current US tariffs remain in flux and reintroducing tariffs could heighten import costs. The overall consensus sees a cautious but steady trajectory for the USD, impacted by these developments.

Trump’s Tariff-palooza: Macro & Market Impacts…

The desk believes that the recent tariff announcements, termed a 'tariff-palooza' by MUFG EMEA, signal a significant increase in market volatility and recession risks. This aligns with our broader outlook for 2025, which anticipates heightened uncertainty in trade negotiations and fiscal policy. Per the full note from MUFG, the unexpected nature of these tariffs has jolted investor sentiment and corporate strategies, suggesting a more cautious approach moving forward. The potential for tariffs to be negotiated away quickly remains a critical factor in determining market stability.