Uncertain U.S. Tariff Outlook May Delay Economic Dividend Release

　　The latest legal setback faced by U.S. President Donald Trump regarding tariffs has not only increased uncertainty for American importers but will also delay the realization of the economic windfall previously predicted by Commerce Secretary Howard Lutnick.

　　On Friday night, the U.S. Court of Appeals ruled that most of Trump’s global tariffs are illegal. This not only adds to policy complexity but also questions the president’s authority to incentivize domestic production or procurement through the imposition of tariffs.

　　While the case undergoes further review, the judges have allowed these tariffs to remain in effect, which could cause business investment decisions to stall until the cost of tariffs becomes clear.

　　“We know these tariffs will remain in place at least until mid-October, after which Trump may appeal the case to the Supreme Court,” said Jennifer McKeown, Chief Global Economist at Capital Economics, on Monday. “Therefore, the actual outcome may still require a long wait.”

　　Such a timeline not only poses a drag on economic growth but may also present political challenges for Trump. The president has always prioritized speed over substance in trade negotiations and has promised that investment commitments secured through negotiations would lead a manufacturing revival. On Monday, Asian and European financial markets appeared unaffected by the ruling, while U.S. markets were closed for Labor Day.

　　Carsten Brzeski, Global Head of Macro at ING, stated, “For any company doing business with the U.S., this means no structural corporate decisions will be made at present. Although markets seem numb to trade-related events, the court ruling will reignite uncertainty.”

　　Jonathan Gold, Vice President of Supply Chain and Customs Policy at the National Retail Federation, said in a statement after the ruling, “The current ongoing instability threatens economic growth and will ultimately result in American consumers paying higher prices for goods and services.”

　　Economic “Strength”

　　In March, Lutnick had described a scenario in which Trump’s trade policies would translate into investment and begin to drive construction around this time.

　　He told the media, “Starting from the third quarter, you will feel some of Trump’s influence, and by the fourth quarter, you will truly feel the strength of the Trump economy.”

　　However, as the implementation of tariff policies has proven more difficult than expected, and trade agreements with the EU, Japan, South Korea, and other economies remain vague and unenforceable frameworks rather than comprehensive, predictable accords, the initial confidence has faded.

　　Meanwhile, the U.S. economy has yet to display the robust vitality Lutnick described nearly six months ago.

　　A report to be released Tuesday by the Institute for Supply Management (ISM) is expected to show that U.S. manufacturing has been in contraction for six consecutive months. A report on Friday may indicate that employers were reluctant to hire in August, and the unemployment rate could climb to a nearly four-year high.

　　Simon Evenett, Professor of Geopolitics and Strategy at the International Institute for Management Development in Lausanne, Switzerland, said some companies have decided to increase production in the U.S. But he added that for those still on the sidelines, this case will likely “delay approvals until the third quarter of 2026.”