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Gold rose and the dollar fell on Monday after Donald Trump deepened uncertainty over global trade by imposing new 15 percent tariffs in response to a U.S. Supreme Court ruling that his previous policy was illegal.
Trump responded to Friday’s landmark ruling by the US top court by announcing flat-rate tariffs on US trading partners, which are set to take effect on Tuesday.
The new tariffs rely on the Trade Act of 1974 and would allow Trump to impose import restrictions for up to 150 days. The Supreme Court ruled that the president had overstepped his authority in using emergency powers to impose his “Liberation Day” tariffs last year.
The dollar weakened 0.3 percent against a basket of currencies of major trading partners, while gold rose 0.7 percent to $5,142 a troy ounce.
Futures tracking the S&P 500 and Stoxx Europe 600 stock indices slipped 0.5 percent and 0.2 percent, respectively.
Bitcoin fell 2.7 percent to $65,801 per token. Yields on 10-year Treasuries, which move inversely to prices, fell 0.01 percentage point to 4.07 percent.
“The market is pricing in uncertainty because they don’t know where the tariffs are going to land,” said Ekaterina Bigos, chief investment officer for Asia ex-Japan at BNP Paribas Asset Management.
Trump’s “Liberation Day” tariff announcement in April shook global markets, but stocks, led by the AI ​​boom, have since risen to new record highs.
But equities in Asia jumped on Monday as investors welcomed the prospect of lower tariffs for some exporters under Trump’s proposed new rule.
Hong Kong’s Hang Seng index rose 2.4 percent. Taiwan’s Taiex closed 0.5 percent higher and South Korea’s Kospi closed 0.7 percent higher. Japan’s markets were closed.
Markets in mainland China, which would be one of the countries to benefit most from the 15 percent tariff, were also closed.
China’s Commerce Ministry, in its first official reaction to the Supreme Court ruling on Monday, said it opposes unilateral tariffs and is conducting a “comprehensive assessment” of the impact of the ruling.
“We also note that the US is preparing alternative measures, such as trade investigations, to maintain its tariffs on trading partners,” the ministry said. “China will keep a close eye on this and firmly safeguard its interests.”
The new headline tariff rate of 15 percent would reduce the average weighted levy on Asian goods to 17 percent from 20 percent, while that on China would fall to 24 percent from 32 percent, Morgan Stanley economists said in a report.
While this relief may be “temporary”, as the US is expected to impose new tariffs on certain sectors and economies, “it appears to us that the tariffs on Asia have probably reached a peak”.
