US court suspends Trump tariffs; the Chamber of Commerce says there is no impact on orders. The Thai National Shippers’ Council warns the appeal could drag on to the Supreme Court.
CIMB Thai views the court ruling as a short-term positive factor amid ongoing high uncertainty, while Kiatnakin Phatra Financial highlights the need to watch for Trump’s next 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.
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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.
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.
Source: The Nation
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
