Trade uncertainty: legal rulings and market outlook

Recent court decisions keep tariff policy in the spotlight. 

Tariff update: mixed signals from the courts 

In recent weeks, U.S. trade policy has returned to the spotlight. A ruling by the Court of International Trade suggested potential changes, but a federal appeals court has temporarily blocked that decision. As a result, current tariffs—covering sectors like steel, aluminum, and autos—remain in place. 

This ongoing legal tug-of-war is prolonging uncertainty for businesses and investors. Here’s a quick summary of the potential impacts: 

• Economic impact: A hypothetical reduction in tariffs could lift GDP by 0.1% for every one percentage point drop in average rates, with a similar effect on inflation. But for now, it’s all still under negotiation. China has pushed back against the latest U.S. accusations. 

• Market reaction: While the S&P 500 has shown signs of recovery, several headwinds remain—high valuations, 10-year Treasury yields hovering near 4.5%, fiscal uncertainty, and pressure on corporate margins. New tariffs could also emerge in sectors like semiconductors or pharmaceuticals. 

Market implications: 

Tariff policy remains uncertain — and likely to stay in focus. Until there’s more clarity, volatility may continue across markets. 

CEO confidence just saw its sharpest quarterly drop in nearly 50 years, driven in part by trade policy uncertainty. 

Source: Raymond James