US appeals court reinstates Trump’s global tariffs

Good morning. Here's what happened overnight and what you need to know today.

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1.

Tariff rulings: A US federal appeals court has temporarily paused a ruling against President Donald Trump’s global tariffs, allowing the levies to remain in place while the court considers a longer stay. The US Court of Appeals for the Federal Circuit issued a brief order granting the stay, following a request from the Justice Department, which argued that the lower court’s ruling harmed US diplomacy and intruded on Trump’s authority to conduct foreign affairs. Yesterday, the US Court of International Trade ruled Trump overstepped his authority under the International Emergency Economic Powers Act (IEEPA) by imposing sweeping tariffs on nearly every US trading partner. Overnight, US District Court Judge Rudolph Contreras also issued a narrower injunction, blocking the administration from collecting tariffs on educational toy makers Learning Resources and hand2mind, but delaying its effect for two weeks to allow time for an appeal. Meanwhile, trade talks with Japan and India are ongoing, and White House economic adviser Kevin Hassett said three trade deals were nearly done. (Bloomberg)(NYT)

2.

Nvidia push: US stocks rose slightly as Nvidia booked gains after reporting higher-than-expected quarterly sales growth, driven by customers stockpiling AI chips ahead of US export restrictions on China. The Dow rose 0.28%, the S&P 500 gained 0.40%, and the Nasdaq added 0.39%, after a federal appeals court reinstated tariffs. Boeing also climbed after CEO Kelly Ortberg said the company aims to increase production of its best-selling 737 MAX jets to 42 aircraft per month in the next few months and boost output to 47 a month in early 2026. Best Buy shares fell after cutting its annual comparable sales and profit forecasts. US initial jobless claims rose 14,000 to a seasonally adjusted 240,000 last week, with continuing claims rising 26,000 to 1.919 million, the highest since November 2021. The US economy contracted at a revised 0.2% rate in the first quarter, while corporate profits fell USD118.1 billion in the biggest drop since the fourth quarter of 2020. (Bloomberg)(Reuters)

3.

Trump talk: Jerome Powell met President Donald Trump at the White House on Thursday “to discuss economic developments including for growth, employment, and inflation,” the US Federal Reserve said. Invited by Trump, the Fed chair did not discuss specific expectations for monetary policy, stressing instead that “the path of policy will depend entirely on incoming economic information and what that means for the outlook,” according to a statement. Trump, who has repeatedly criticised Powell over interest rates, told him at the meeting that “he believes the Fed chair is making a mistake by not lowering rates,” White House press secretary Karoline Leavitt said. That “is putting us at an economic disadvantage to China and other countries,” she added. Powell’s term expires in May 2026. Trump has suggested he could fire Powell but in late April said he had “no intention of firing him.” (Fed)(Bloomberg)(Capital Brief)

4.

Staff shakeup: Moves by ABC management to implement a new operating model have sparked fears of job cuts, ahead of upcoming pay talks that will pose the first public test for new managing director Hugh Marks. ABC staff were this week informed about the new operating model which involves changes to the ways the public broadcaster's support staff work and how it conducts activities including budget management, rostering and recruitment. In a note to staff viewed by Capital Brief, the ABC’s director of news Justin Stevens said the changes were designed to resolve various challenges including "unclear roles, overly broad responsibilities and inconsistent and sometimes cumbersome processes." Stevens said the changes would not "significantly change" the number of support roles across the ABC and that anyone affected would be contacted directly during a four-week consultation process. It will take effect on 1 October and apply to all teams. (Capital Brief)

5.

Shifting goalposts: Westpac is changing lending rules to simplify financing the gas industry, telling investors that it intends to change the global warming target that it uses to assess energy transition plans, according to the AFR. The move will loosen ambitions from 1.5 degrees over pre-industrial levels, to matching the goals of the Paris Agreement which is “well below two degrees.” “Ambition is critical, but we also have to be pragmatic, and provide a bit more flexibility, and take a more balanced approach,” Westpac chief sustainability officer Fiona Wild said. “Gas has long been recognised as a transition fuel and the Australian government has been really clear on the role it sees gas playing in decarbonisation of Australia’s economy.” The news comes as Swiss town Blatten was destroyed after a glacier collapsed on the town in a valley below on Wednesday. Climate change is causing glaciers to melt faster and permafrost to thaw. (AFR)(BBC)

6.

AI inked: The New York Times will license its editorial content to Amazon for use across its artificial intelligence platforms, the first agreement the masthead has made following years of legal battles between AI tech giants and media outlets. The NYT said that the agreement will “bring Times editorial content to a variety of Amazon customer experiences,” including recipes from NYT Cooking and content from The Athletic. Uses will include real-time display of summaries and short excerpts of NYT content within Amazon products and services, such as Alexa, and training Amazon’s models. The NYT is still locked in a battle with OpenAI over copyright infringement, accusing the AI giant of using millions of the paper’s articles to train chatbots without compensation. The deal comes as writing assistant tool Grammarly raises USD1 billion ($1.6 billion) from General Catalyst to expand its AI offerings. (NYT)(Bloomberg)(Reuters)(General Catalyst)

7.

War chest: The International Monetary Fund (IMF) reached a deal with Ukraine to disburse the next tranche of a USD15.5 billion ($24.1 billion) loan package. After a visit to Kyiv this week, the IMF said that its staff have agreed to release USD500 million, in its ninth disbursement since the program was approved in 2023. The disbursement remains subject to approval by the IMF Executive Board. The IMF statement says that Ukraine’s economy remains resilient despite the challenges arising from over three years of war. As the war continues, GDP growth is expected to remain at 2-3% for 2025, reflecting headwinds from labour constraints and damage to energy infrastructure. Inflation rose to 15.1% year-on-year in April, with the IMF adding that financing Ukraine’s large fiscal deficit requires significant external support. The news follows reports that Putin’s conditions for ending the war include a demand that Western leaders pledge in writing to stop enlarging NATO eastwards. (IMF)(Bloomberg)(Reuters)

8.

Blue Skies: JetBlue and United Airlines agreed to a partnership that will see customers use loyalty points across the two carriers. The deal, coined ‘Blue Sky,’ will allow travellers to book flights on both carriers’ websites, while earning and using points on their respective frequent flyer programs. JetBlue will provide United access to slots at New York’s JFK airport for up to seven daily round-trip flights, while JetBlue will be able to operate more flights out of Newark International Airport, but the carriers will not coordinate on schedules or share revenue. The news comes as the US Federal Aviation Administration is struggling with a staff exodus which could complicate its regulatory and air-traffic control work. The agency is under scrutiny after January’s fatal midair collision in Washington and a series of technology failures. Down under, Virgin Australia offered employees $3000 worth of share rights as it prepares for an IPO. (Capital Brief)(United & JetBlue)(WSJ)(The Australian)