A leading economic institute director has cautioned against misconstruing the recent court decision on the US tariffs as a sign of de-escalation in the trade dispute. Michael Hüther, the director of the Institute of the German Economy in Cologne, warned that even if the courts ultimately block the tariffs, the damage to trust has already been done.
The economist pointed out that the trade policy, in conjunction with uncertain security assurances and speculation about the role of the US dollar as a global currency, has created a deep-seated mistrust. He urged Germany and the European Union to focus on their own strengths, citing the intensified cooperation with the United Kingdom and the new German government’s focus on external economic policy as positive developments.
The court ruling in New York, which declared the tariffs as invalid, has sparked a new wave of uncertainty in the trade dispute. The judges found that US President Donald Trump overstepped his authority by imposing blanket tariffs on imports from countries that export more to the US than they import. The US government has already filed an appeal against the decision.
Hüther described the Trump presidency as marked by chaos, with institutions and rule of law being largely ignored or reinterpreted, leading to the administration’s increasing entanglement in legal pitfalls. While it remains unclear whether the tariff policy will ultimately come to an end, the uncertainty is certain to persist, the institute’s director said.