Trade game shifts: Watch for Trump’s new policy moves

On Wednesday, May 28, 2025, the International Trade Court in Manhattan, New York, issued a historic ruling to revoke the “reciprocal tariffs” imposed by President Donald Trump on April 2, 2025. The court’s key finding was that the president had exceeded his authority in implementing these tariffs.

The tariffs in question consisted of two parts: a 10% worldwide tariff applied to all countries, and an additional retaliatory tariff imposed at varying rates on 57 countries and territories — for example, Thailand faced a 36% rate, and Vietnam 46%. While the worldwide tariff had already come into effect, the higher retaliatory tariffs had been temporarily deferred for 90 days until early July.

The core issue revolved around Trump’s use of the International Emergency Economic Powers Act (IEEPA) — a 1977 law allowing the US president to control international economic activity “in times of emergency,” including imposing economic sanctions against countries deemed national security threats.

However, the court ruled that setting customs tariffs and regulating international trade is a power reserved exclusively for Congress, not the president. It found that Trump bypassed the legislative process by invoking IEEPA and claiming a national security emergency without congressional approval.

The International Trade Court ruled that President Donald Trump cannot use the tariff measures in question, stating that the IEEPA law, which Trump cited to impose the tariffs, “does not grant the president the authority to set international customs tariff rates.”

The three-judge panel unanimously declared that the IEEPA does not grant the president authority to set international tariff rates. They reaffirmed that only Congress has constitutional authority over foreign trade regulation. CNBC noted that this ruling strongly criticized Trump’s claim that the trade deficit constituted a national emergency.

The court ordered a permanent repeal of all Trump’s tariff orders issued under IEEPA and prohibited the government from collecting these tariffs in the future. Importers who have already paid the tariffs may apply for refunds on a case-by-case basis if they have not been reimbursed automatically.

Additionally, the judges mandated that the Trump administration issue a new order reflecting the permanent injunction within 10 days.

This ruling resulted from a lawsuit filed by 13 states led by Oregon, along with five small businesses. The court found that there was no legal basis for Trump’s worldwide tariff order and retaliatory tariffs. Plaintiffs included a New York wine importer and an educational kit manufacturer from Virginia, who argued that the tariffs threatened their business survival.

Following the ruling, the Trump administration announced plans to appeal and questioned the court’s authority, noting that the judges were not elected.

List of Tariffs Revoked

The Trump tariffs revoked were those imposed under the economic emergency powers law, IEEPA, and consisted of two parts:

On February 1, tariffs were imposed on Canada, Mexico, and China in response to illegal immigration and fentanyl drug trafficking. Canada and Mexico faced a 25% tariff, while China was initially set at 10%, later increased to 20%. These tariffs were justified as economic sanctions under IEEPA.

On April 2, Trump announced reciprocal tariffs worldwide, again under IEEPA. These included a 10% basic worldwide tariff (Worldwide Tariffs) and higher retaliatory tariffs varying by country, such as 36% for Thailand and 46% for Vietnam.

Sector-Specific Tariffs ‘Not Revoked’

Not all of Trump’s tariffs were overturned by the recent court ruling. Sector-specific tariffs, such as the 25% tariffs on steel and aluminium announced on February 11, and the 25% tariffs on automobiles and auto parts announced on March 26, remain in effect. These tariffs were imposed under Section 232 of the Trade Expansion Act of 1962, which is unrelated to the current court case and ruling.

Section 232 empowers the US Department of Commerce, relevant agency heads, and stakeholders to request investigations into the impact of specific imports on national security. The investigation, conducted in consultation with the Department of Defence, must be completed within 270 days before presenting findings to the president.

Currently, the US enforces this law on two categories: steel and aluminium, and automobiles and auto parts. Several other products, including copper, semiconductors, and pharmaceuticals, are still under investigation by the Department of Commerce.

Global Trade Game Shifts: US Pauses — Watching for Trump’s Next Move

Prices Rise Again for US Consumers

Poj Aramwattanon, Chairman of the Thai Chamber of Commerce, said the US court’s suspension of Trump’s tariffs is a positive sign for the current economic situation. The retaliatory tariffs imposed by the Trump administration significantly impacted global trade, including the US economy.

“The tariffs caused concern among US consumers, who feared rising prices. The court’s decision is therefore welcome. However, clarity is still needed on the court’s orders — especially whether they take effect immediately. Since Trump is appealing, the outcome is not yet final.”

Wisit Limluecha, Vice Chairman of the Thai Chamber of Commerce and President of the Thai Future Food Trade Association, added that goods already ordered and shipped have not yet been affected by the court ruling. “We need to wait and see if the appeal will be allowed. If the appeal fails, global trade should improve from this point.”

However, uncertainty remains, and close monitoring is required. The 10% tariff that has already been applied is likely to remain in place as announced, but it remains to be seen how feasible it will be for importers to claim refunds for tariffs already paid, as the court’s order specifies refunds will be considered on a case-by-case basis.

FTI Highlights Continued Uncertainty

Kriangkrai Thianukul, Chairman of the Federation of Thai Industries (FTI), said that the US International  Trade Court’s preliminary injunction to suspend President Donald Trump’s tariff hikes is positive for Thailand. The revocation of import tariffs announced on April 2, 2025, helps unlock the trade situation.

Kriangkrai added that while the news is encouraging, the speed of the court’s final decision will greatly affect confidence. The timeline remains uncertain, so all parties must monitor developments closely.

 Negotiations may proceed in two ways: either accelerate discussions within 30 days or delay them pending the court’s next moves.

“The overall situation remains volatile. This uncertainty causes most investors to remain cautious and postpone investment decisions. Although the outlook isn’t very positive, the court’s preliminary ruling does offer some psychological relief,” he said.

Supreme Court Case Could Take 1–3 Years

Thanakorn Kasetsuwan, Chairman of the Thai National Shippers’ Council, said although the US court suspended retaliatory tariffs, this was a lower court ruling. Trump has 30 days to appeal. If the appeal is accepted, the case could take 1 to 3 years to resolve, possibly extending beyond Trump’s term in office. During this period, Trump’s tariffs remain in effect.

“There are two possible outcomes. If the court rejects Trump’s appeal, the tariffs must be cancelled. If the appeal is accepted, litigation could continue up to the Supreme Court. Meanwhile, Trump’s tariff orders stand, and the 90-day postponement on retaliatory tariffs ends on July 9, when Thailand faces a 36% tariff if no negotiation is reached,” Thanakorn explained.

He added that exporters must negotiate with importers on whether to continue ordering goods, since importers will be responsible for the tariffs. Importers are not paying tariffs now, but after July 9, tariffs will apply. Negotiations are needed to find a mutually acceptable solution regarding tariff costs.

Short-Term Tariff Pause Provides Temporary Relief

Amonthep Chawla, Assistant Managing Director and Head of Research at CIMB Thai Bank, said that although markets welcomed the court’s injunction blocking Trump’s tariff increases, uncertainty still lingers. In the short term, this positive news caused global stock markets—especially U.S. futures and Asian markets—to rally immediately, while the U.S. dollar began recovering from previous selling pressure.

However, investor concerns remain, as the overall outlook is still clouded by uncertainty. Particularly worrying is the U.S. leadership’s potential to push forward tax policies through other available channels, including the use of Section 301, Section 232, or legislation supported by the Republican-controlled Congress.

“Today’s market gains are real but not yet sustainable. The market is relieved, but not fully confident. The court issued a brake, not a full stop. Trump still has many options, especially presidential powers that allow a variety of approaches. Let’s also remember many Supreme Court judges were appointed by Trump himself,” he noted.

Under this ongoing uncertainty, capital markets remain in a “wait and see” mode, with global investors still cautious. Therefore, despite the tariff suspension boosting stock indices and the dollar, buying momentum has not returned to pre-tariff announcement levels. This reflects investor scepticism over whether tariff policies will be permanently shelved or only temporarily paused.

Watching for Trump’s Next Moves

Pipat Luengnaruemitchai, Chief Economist of Kiatnakin Phatra Financial Group, said the US trade court officially cancelled the Trump tariffs, but the issue is far from over. The White House has already filed an appeal, which could reach the Supreme Court, prolonging uncertainty. He outlined three possible options for Trump:

Issue a new emergency declaration with clearer and more specific justification, though difficult since the court stressed the emergency must be genuine and powers are not unlimited.

Use other trade laws such as Section 301 or Section 232, which include defined procedures, similar to the approach during the first U.S.–China trade war. However, these require country- and product-specific investigations.

Seek additional authority from Congress through legislation, though political conditions may not be favorable.

He views the ruling as an “emergency brake” on executive authority in international trade policy, cautioning against policy changes based on political moods or strategies. Without judicial checks, future tariffs might repeatedly be justified as responses to “national security threats” whenever diplomatic issues arise.

From Thailand’s perspective, the ruling is good news. Although tariff details remain unclear, it eases tensions by potentially preventing a 36% U.S. tariff on Thai goods. This could support a better-than-expected outlook for the Thai economy.