Hong Kong-Listed Chinese Stocks Rise After U.S. Tariffs Ruled Illegal
Trump Signals New Tariffs Under Other Legal Provisions
Even So, With the 'Worst-Case Scenario' Averted, Markets Breathe Easier
Share prices of Chinese companies listed on the Hong Kong stock market rose after the U.S. Supreme Court ruled that reciprocal tariffs were illegal.
On the 23rd (local time), the Hang Seng China Enterprises Index (HSCEI), which is composed of Chinese mainland companies listed on the Hong Kong stock exchange, climbed 2.7% from the previous trading day. Major technology stocks such as Alibaba (3.47%), Tencent (3.07%), and Meituan (5.26%) all advanced.
Bloomberg reported that investor sentiment improved as tariff rates on exports to the United States from some countries, including China, are expected to decline.
Previously, the U.S. Supreme Court ruled that the tariff measures imposed on countries around the world by U.S. President Donald Trump, based on the International Emergency Economic Powers Act (IEEPA), were illegal. Morgan Stanley projected that, due to this ruling, the average tariff rate on Chinese products will fall from the current 32% to 24%.
However, President Trump has stated that he intends to maintain his tariff policy by using alternative tools. He has already signed an executive order imposing a 10% tariff on the entire world under Section 122 of the Trade Act, and soon afterward announced that he would raise this tariff rate to 15%.
He also asserted that he would use Section 232 of the Trade Expansion Act and Section 301 of the Trade Act to impose additional tariffs equivalent to the now-invalidated reciprocal tariffs.
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Nevertheless, the market appears relieved, viewing the ruling as signaling that the worst-case scenario of the Supreme Court fully endorsing reciprocal tariffs has passed.
Trump Donald, President of the United States, was holding a press conference at the White House on the 21st (local time). Yonhap News
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