US Tariff Ruling Sparks Market Optimism, But Uncertainty Remains - Analyst
By Zufazlin Baharuddin
KUALA LUMPUR, May 29 (Bernama) -- Investor sentiment has improved following a US trade court decision to block most of US President Donald Trump’s tariffs on imports into the country.
However, Mohd Sedek Jantan, UOB Kay Hian Wealth Advisors Sdn Bhd's head of investment research, said the global economic outlook remains uncertain in the near term, although the ruling has sparked short-term market optimism.
“After the announcement of the ruling, US futures rose amid a rally in the US dollar. However, it is still too early to predict the broader economic impact globally, including on Malaysia,” he told Bernama.
The US Court of International Trade on Wednesday ruled that Trump was not authorised to invoke emergency economic powers legislation to impose the sweeping global tariffs announced in April.
The ruling could lead to the removal of new tariffs from many countries and could boost prospects for major global economies, as well as easing the uncertainty caused by the ongoing trade disputes.
However, the Trump administration has announced plans to appeal the decision, and the timeline for the ruling to take effect remains uncertain, as the court has allowed up to 10 days for the government to lift the tariffs.
Mohd Sedek said Malaysia should not pause any trade negotiations despite the uncertainty ahead, especially as Malaysia has previously been in talks with the United States to reduce the 24 per cent reciprocal tariff, which is currently being paused. “We cannot predict what will happen in the future, so it is better to continue with the trade redirection and explore new markets. If the US tariffs are cancelled, that would be a bonus for us,” he added.
He advises that all current government initiatives, such as those involving ASEAN, the Gulf Cooperation Council countries and China, should continue as planned regardless of whether the US tariffs are dropped in the future.
-- BERNAMA