President Donald Trump's latest legal setback regarding tariffs is increasing uncertainty for American importers and delaying the economic benefits that Commerce Secretary Howard Lutnick predicted his administration would generate.

A US appeals court ruling late Friday, declaring most of Trump's tariffs illegal, adds further complications and calls into question the president's authority to tax companies to incentivize them to produce or source needed resources domestically.

The judges left the levies in place while the case proceeds, threatening to freeze corporate investment decisions until the cost of the tariffs becomes clearer.

"We know these tariffs will remain in place until at least mid-October, and then Trump will likely take them to the Supreme Court," Jennifer McKeown, chief global economist at Capital Economics, said on Bloomberg Television on Monday. "So, there could be a very long delay before we really know what happens."

Such timing not only presents a drag on growth but also a potential political challenge for Trump, who has prioritized speed over substance in trade deals and promised that the investment pledges he secured in negotiations would lead to a manufacturing revival. Financial markets in Asia and Europe appeared to shrug off the ruling on Monday, while US trade was closed for the Labor Day holiday.

"For any company doing business with the US, this means no structural corporate decisions will be made right now," said Carsten Brzeski, ING's global head of macro. "While markets seem numb to all things trade, the court ruling will bring back uncertainty."

Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, said in a statement after the ruling that "ongoing instability threatens economic growth and will ultimately, and inevitably, result in higher prices for goods and services paid by American consumers." (alg)

Source: Bloomberg