US appeals court gives Trump’s tariffs a temporary reprieve

Good morning, happy Friday and welcome to FirstFT Asia. In today’s newsletter:

• Trump wins a tariff reprieve

• Ex-Goldman banker sentenced for 1MDB role

• India’s Instagram prince

A US federal appeals court gave Donald Trump’s global tariff plans a temporary reprieve yesterday, pausing a ruling that had found his “liberation day” levies to be illegal. The decision marks a small legal victory for the president’s tariffs but leaves their longer-term fate in the balance.

What happened: In a ruling yesterday, the US Court of Appeals for the Federal Circuit granted the temporary stay “until further notice”, during which the US can continue to collect tariffs. The stay was issued after a judicial decision on Wednesday night that Trump could not use emergency economic powers to impose sweeping tariffs on trading partners. The surprise ruling drew a backlash from the White House, which accused judges of “judicial over-reach”.

Wall Street analysts suggested Wednesday’s court ruling would slow down, but not derail, the White House’s plans. “The administration is likely to either successfully appeal the ruling or to use other authority . . . to keep tariff rates high and revenue substantial,” Citi analysts wrote in a note yesterday. “For now, the ruling will complicate and potentially delay trade negotiations.”

What’s next? The White House has vowed to go to the Supreme Court to try to overturn the ruling that Trump’s tariffs are illegal. Should they fail, Trump’s top trade and economic advisers have insisted there are other ways for the president to pursue his trade war — but legal experts said his options are limited. In the meantime, EU and US trade negotiators will meet as planned next week on the sidelines of the OECD ministerial meeting in Paris. An EU diplomat close to the trade discussions said that the ruling had bought the bloc time. “I don’t think we need to rush,” the diplomat said.

For more analysis on Trump’s tariffs, sign up for Alan Beattie’s Trade Secrets newsletter if you’re a premium subscriber or upgrade your subscription here.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: India reports fourth-quarter GDP and Australia publishes April retail sales.

• Shangri-La Dialogue: The key Asian defence summit begins in Singapore.

• Polish election: A neck-and-neck presidential race, which has become the latest battleground for the global populist right, culminates with Sunday’s run-off vote.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Tim Leissner, the disgraced former Goldman Sachs banker at the heart of the multibillion-dollar 1MDB scandal, has been sentenced to two years in prison. Leissner’s sentencing brings to an end one of the most infamous cases in Wall Street’s history, in which prosecutors said Goldman bankers helped corrupt Malaysian officials misappropriate about $4.5bn from its sovereign wealth fund.

2. China has pledged to open its markets to more products from Pacific Island nations and increase economic assistance as the US retreats from the largely impoverished but strategically contested region. Hosting foreign ministers from 11 Pacific Island countries in Xiamen, Chinese foreign minister Wang Yi also promised $2mn to combat climate change in the region.

3. Trump told the Federal Reserve chair Jay Powell that he was making a “mistake” by not loosening US monetary policy, in their first meeting of the president’s second term. The talks follow pressure from the president on the Fed chair to lower interest rates in order to blunt the impact of the administration’s trade policies.

4. World Economic Forum founder Klaus Schwab has launched a criminal complaint against the whistleblowers whose accusations led to his ousting, as he steps up a campaign to clear his name of alleged impropriety at the organisation he led for more than half a century. Mercedes Ruehl reports from Geneva.

5. The German government is drawing up plans for a 10 per cent tax on global internet giants such as Meta and Google. The move could further fuel transatlantic trade tension at a time when Trump is accusing the EU of treating American companies unfairly and wants to impose tariffs as a response.

News in-depth

Addressing south-east Asian and Middle Eastern leaders in Kuala Lumpur this week, Chinese Premier Li Qiang had a clear message: at a time when Trump is shaking the global trading system, Beijing wants to do business. The message had particular resonance for many of the assembled heads of state whose countries are reliant on exports.

We’re also reading . . . 

• Inside the Vegas bitcoin party: Trump’s two eldest sons called for a new financial order — and the demise of the country’s biggest banks.

• How Paris embraced football: The city was once too snooty for football, writes Simon Kuper. That’s no longer the case, as local club PSG gears up for Saturday’s Champions League final.

• India’s business obstacles: Billionaire industrialist Jamshyd Godrej has big plans for Mumbai — if only he could get through the country’s red tape.

Chart of the day

The sale by seven banks last month of the final slug of loans for Musk’s $44bn Twitter buyout marked an extraordinary turnaround for debt that once appeared to be toxic. Read more on how the lenders’ decision to hold the debt eventually paid off.

Take a break from the news

. . . and meet Maharaja Sawai Padmanabh Singh, the 26-year-old prince of Jaipur. The maharaja is opening hotels and restaurants, playing polo and posing in his elaborate palace for his Instagram followers — even as he tries to maintain his family’s ancient traditions.