European stocks opened higher on Thursday as the U.S. Court of International Trade (CIT) blocked President Donald Trump’s reciprocal tariffs, creating positive momentum in global financial markets. The White House is likely to circumvent the recent court ruling that struck down President Donald Trump’s steep reciprocal tariffs, according to Goldman Sachs. The Wall Street firm suggested that the administration will probably appeal the decision but will also explore using executive powers under Section 301 of the Trade Act of 1974 to reintroduce tariffs.
This section was previously the basis for Trump’s tariffs on China. Goldman’s chief economist Jan Hatzius noted that the administration can impose across-the-board as well as country-specific tariffs under different sections of the Trade Act, implying that the ruling, while a setback, may not change the final outcome significantly for major U.S. trading partners. He added that Section 122 allows the White House to impose import tariffs of up to 15% for up to 150 days on nations with large and serious trade surpluses with the U.S.
The U.S. dollar index, which measures the greenback against a basket of major rivals, rose by 0.2% following the decision to block the tariffs.
By 8:11 AM in London, the euro was 0.2% lower against the dollar, while the British pound was down by 0.1%. The Swiss franc, a safe haven during market turmoil, fell by 0.3% against the U.S. currency. Twenty minutes after the opening bell, the pan-European Stoxx 600 was trading 0.4% higher, with most sectors in positive territory.
Tariff-sensitive stocks such as tech, mining, and autos led the gains, rising by 1.8%, 1.1%, and 0.9%, respectively. Several European countries, including France, Belgium, Germany, Norway, the Netherlands, and Switzerland, observed the Christian holiday of Ascension Day on May 29.
Court blocks Trump’s tariff plans
However, most major markets remained open for trading. German defense firm Renk is looking to the struggling auto sector for talent as it scales up operations amid rising geopolitical tensions and increased military spending. Germany recently passed legislation enabling a significant boost in defense spending.
Renk, known for producing gearboxes for tanks, saw its share price rise over 300% this year and its order book increased by 164% to 549 million euros ($622.3 million) in the first quarter. European shares weren’t the only ones benefiting from the court’s decision. Stocks in the Asia-Pacific region also rose, and U.S. stock futures gained as investors welcomed the ruling against Trump’s tariff plans.
On Wednesday, the Federal Trade Court blocked President Trump’s steep reciprocal tariffs imposed in April, which were intended to correct perceived trade imbalances. The ruling deals a significant blow to Trump’s economic agenda and ongoing trade negotiations. Futures tied to major European indices were trading higher ahead of market open.
German DAX index futures were up by 1.2%, FTSE 100 futures gained 0.8%, and France’s CAC 40 futures rose by 0.2%. Pan-European Stoxx 600 futures saw a 1.3% increase.
