iM Securities said on the 23rd that the U.S. ruling that reciprocal tariffs are illegal could serve as a short-term positive for Korea's stock market. That is because a retreat from President Donald Trump's tariff policy line is inevitable, and a rebound in China's exports to the United States and the resulting butterfly effect are expected.
Earlier, on the 20th local time, the U.S. Supreme Court ruled that the reciprocal tariff measures President Trump imposed on countries around the world based on the International Emergency Economic Powers Act (IEEPA) were illegal. In response, President Trump said he would impose a 15% "global tariff" on each country.
iM Securities cited the following reasons why the ruling is a short-term positive for the stock market: ▲ it publicly signals that there is not strong consensus in the United States on President Trump's tariff policy, ▲ weaker negotiating power for President Trump and a recovery in China's exports to the United States, ▲ the possibility of a weaker dollar, ▲ lower inflation pressure and improved consumer sentiment in the United States due to a pullback in tariff policy, and ▲ the effect of tariff refunds estimated to be up to $175 billion (about 253 trillion won).
Park Sang-hyun, a researcher at iM Securities, said, "Although reciprocal tariffs were ruled illegal, the overall framework of tariff policy, including tariff rates on major countries, has not changed with the implementation of tariff policy 'Plan B,'" and added, "On the contrary, the likelihood is growing that U.S. investigations into unfair trade practices by each country will intensify, expanding uncertainty risks related to trade and investment."
However, Park emphasized that, since President Trump's push for tariff policy has taken a hit, it is a short-term positive for non-U.S. financial markets, especially the stock market.
Park also noted, "It is worth noting that to resolve the midterm election risk stemming from the blow to tariff policy, President Trump could ramp up aggressive stimulus measures."