WASHINGTON, 30 August 2025 – In a significant judicial rebuke of executive overreach, a U.S. federal appeals court has ruled that most of former President Donald Trump’s global tariffs—imposed under the International Emergency Economic Powers Act (IEEPA)—are unconstitutional. The court found that the power to levy tariffs belongs squarely to Congress, not the presidency, underscoring critical boundaries in U.S. trade policy. However, the tariffs remain in force until 14 October, as the administration pursues a possible appeal to the U.S. Supreme Court.
Legal Boundaries Reaffirmed
The crux of the court’s ruling centers on the interpretation of IEEPA. Judges argued that while the act authorizes the executive to regulate imports during declared emergencies, it does not explicitly permit the imposition of broad-based tariffs. As the court warned, granting such unfettered authority would dangerously tip the constitutional balance away from Congress.
This decision reaffirms a May ruling by the U.S. Court of International Trade, which similarly invalidated Trump’s “Liberation Day” and trafficking-related tariffs. Trump’s deployment of sweeping tariffs without legislative backing attracted immediate legal challenges from businesses and multiple states.
Despite the ruling, a panel dissent cautioned that presidents historically have access to broad emergency powers. Meanwhile, the administration has warned that reversing the tariffs could force government refund obligations—threatening significant economic and fiscal fallout, with over US$159 billion already collected in tariff revenues.
Expedition Toward the Supreme Court
The stay issued by the appeals court buys time for the Trump administration to escalate the case to the Supreme Court, which may ultimately determine the line between executive authority and congressional prerogative in trade matters. Trump swiftly condemned the ruling on social media, calling it “a total disaster for the country,” and signaled his intent to challenge it.
Broader U.S. Policy Implications
The verdict is a stark reminder of institutional checks in U.S. governance. Experts and lawmakers are now pushing for legislative clarifications. The newly proposed Trade Review Act of 2025 seeks to reclaim congressional authority by mandating presidential notification and approval for tariffs beyond a 60-day window—highlighting a growing bipartisan effort to prevent future abuses of emergency power.
Regional and Global Implications for Asia
For Asian economies such as Malaysia, this legal development is far more than American domestic politics. Trump’s cavalier use of tariffs rattled global supply chains—particularly in export-driven economies like South Korea, Taiwan, Japan, and Southeast Asia—raising costs and strategic uncertainties. This ruling could signal restored trade stability and predictability if the Supreme Court upholds the appeal, reinforcing norms of legislative oversight in trade policy.
Moreover, as Southeast Asia deepens regional trade integration under frameworks like RCEP, clarity in U.S. tariff policy reduces the risk of sudden shocks and enhances investor confidence. It also sets a precedent: emerging economies may now reference this outcome as a legal safeguard against executive-driven trade disruptions.
