As Musk exited the White House with a grenade, a ‘nasty’ surprise awaited Trump

The trade ceasefire may not last, but for a moment on Thursday there was hope that Donald Trump’s wild trade train may have been derailed by a US court.

A federal court declared Trump didn’t have the authority to impose the most extreme of his tariffs on most trading partners, including China.

Make no mistake, team Trump is already working on a strategy to overturn the legal judgment roadblock. But it stands as a serious setback to his ambitions to remake US manufacturing and upend global trade balances.

“Nasty”: Donald Trump fires back at a reporter’s question.Credit: Bloomberg

So for a little while, at least, other governments, markets and businesses around the world can exhale as it seems to be further evidence that Trump’s negotiating position is unravelling.

If stock markets are a measure, there was plenty of exuberance – Wall Street’s Nasdaq Index futures bolted ahead almost 2 per cent within hours of the court decision.

Markets figure that at the very least, this will throw into disarray the trade negotiations that were the subject of a 90-day pause. The ruling also comes on the heels of several backdowns from the extreme tariff positions that the US president has declared since taking office.

If April 2 was “Liberation Day”, then May 28 could be tentatively marked as “Cessation Day”.

Trump’s detractors, particularly those in financial markets, have come up with a derisory brand for his wild swings away from his initial “nuclear” positions on tariffs. They’ve started talking up the “TACO trade”, TACO being an acronym for “Trump Always Chickens Out”.

The president, who is well known for his pathological need for admiration and adoration, clearly loathes the term, calling a reporter’s question about it “nasty”.

“It’s called negotiation,” Trump snapped. “They wouldn’t be over here today negotiating if I didn’t put a 50 per cent tariff” on Europe.

“The sad thing is, now, when I make a deal with them – it’s something much more reasonable – they’ll say, ‘Oh, he was chicken. He was chicken.’ That’s unbelievable. I usually have the opposite problem. They say, ‘You’re too tough, Mr President’.”

Despite Trump’s protestations, investors are picking up on his Michael Jacksonesque moonwalk in his trade policies – appearing to walk forward but going backwards.

The timing of his legal failure was especially poignant as it coincides with his “first buddy” Elon Musk publicly farewelling his DOGE duties and returning to his real day job of running the increasingly challenged electric carmaker Tesla.

Musk grenade

The billionaire threw a decent-sized grenade as he exited, taking aim at Trump’s signature legislative priority to cut taxes and lift border security spending, which he said increases America’s budget deficit and undermines the work of his government efficiency team.

Elon Musk is walking away from Washington.Credit: Bloomberg

According to reports in The New York Times, Musk also made it clear that he was disillusioned with Washington and frustrated with the obstacles he encountered as he upended the federal bureaucracy, which the newspaper suggested raised questions about the strength of the alliance between the president and the world’s richest man.

Musk’s comments surely stung, but it was an electric toy maker, a sewerage pipe manufacturer, a sake distributor, a producer of fishing equipment and a retailer of women’s cycling gear who bizarrely became the thorns in Trump’s side.

This motley bunch of US businesses banded together to mount a case that Trump overstepped his legal authority to impose tariffs on the rest of the globe.

They, alongside a swag of US states, successfully argued that Trump could not invoke the International Emergency Economic Powers Act which was designed to address “unusual and extraordinary” threats during a national emergency as justification to impose tariffs.

It should be noted that the ruling does not affect tariffs issued by the Trump administration under separate legal authorities, including levies on steel, aluminium and cars, and others that Trump has threatened on pharmaceuticals, semiconductors and other critical products.

Still, there will be plenty of world leaders reassessing their negotiating positions and reaching for that 50-year-old Scotch for a celebration – prematurely or not.

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