Tariff risk thickens market fog

Just five months ago, US tariff barriers were the be-all and end-all for world markets and a potential trigger of global recession ahead. Not only has that proved wide of the mark so far, but no one seemed to bat an eyelid after it was legally challenged once again last week. Even though Americans were switched off for the Labour Day weekend, the lack of global reaction to Friday's legal curveball into Washington's tariff plans likely shows just how confused markets and businesses have become by the whole trade upheaval.

- Mike Dolan

In a decision delivered after markets closed on Friday, a divided US appeals court ruled most of Donald Trump's tariffs are illegal, undercutting the president's use of the levies as a policy tool.

But the court allowed the tariffs to remain in place through Oct 14 to give the administration a chance to file an appeal with the US Supreme Court.

Mr Trump lambasted the decision and said if the tariffs were removed, “it would be a total disaster for the country”.

“Disaster” seems an extreme view of just returning tariffs to last year’s levels, but it could well be a disaster for Mr Trump’s economic plan — not least annual federal tariff revenues now targeted at some US$300 billion (9.7 trillion baht).

To the extent to which Treasuries might be the sharp end of that stick, the absence of US bond trading on Monday's holiday may explain some of the stasis during the day.

More broadly, investors around the world likely hesitated on making any conclusions until Wall Street returned to pass judgement first.

But initial readouts from bank strategists suggested three main assumptions underlying the relative nonchalance.

The “reciprocal” tariffs governed by the ruling will likely be waved through by the Supreme Court next year, they reckoned, and many of the tariffs will likely remain in place beyond Oct 14 once the Supreme Court agrees to hear the case and would stay until that ruling is made — probably in the second quarter of 2026.