Despite the ruling, Yardeni expects the administration to seek smaller agreements with trade partners and try to present them as victories. “There will be short letters of agreement, or maybe five pages of frameworks that the President can declare as victory and then put this issue behind us,” he added.
Also Read | Elon Musk says Trump’s new bill undermines DOGE’s workThe legal route forward remains uncertain. The decision could reach the Supreme Court, which may need to decide if the use of a national emergency to justify tariffs was valid. Arvind Sanger, Managing Partner at Geosphere Capital Management, said the court did not challenge all tariffs. “What the court did not rule out or push back on is the Section 232 tariffs on steel and aluminum,” he explained. He believes these industry-specific measures might still be used in future trade talks.
Markets have responded to both the legal uncertainty and recent technology spending news. Yardeni pointed to the rebound in US tech stocks as a key driver of optimism. He said major companies like Microsoft, Meta, and Google plan to spend around $350 billion on cloud and AI infrastructure. “Nvidia today, after the market closed in the United States, certainly provided some very good indicators of how strong their sales still are,” he noted. The news pushed futures markets higher.Sanger said global investors are still looking at ways to lower their exposure to US assets. “Yes, because of the uncertainty in the US, there has been a move to diversify away from the US and reduce risk,” he said. However, he added that the strength of the US tech sector and concerns about fiscal deficits may keep the dollar from weakening too much in the near term.
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Both experts agree that the issue of refunding collected tariffs could add pressure. Sanger cited a recent argument by former Trump advisor Peter Navarro, who claimed that tariff revenue could reduce the fiscal deficit. But with the court’s ruling, Sanger said, “That argument is out the window.”
With new tariff classifications possibly tied to specific industries like copper, pharmaceuticals, and auto parts, analysts expect the administration to shift its strategy rather than abandon tariffs entirely. Yardeni summed it up: “It is not clear which way the administration is going to go. Right now, it looks like it is just going to stick with its current policies.”
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