The US Supreme Court’s 6–3 ruling striking down President Donald Trump’s tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, is a landmark decision not just for American constitutional law, importers and citizens, but for every trading partner that spent the past year negotiating under the weight of those duties.
For Southeast Asian countries like Indonesia, Malaysia and Cambodia, all of which struck deals with Washington at elevated tariff rates, the ruling raises an important question: what happens to a deal when the legal basis for one side’s leverage is invalidated?
The IEEPA-based tariffs were the primary instrument behind Trump’s bilateral trade negotiations with ASEAN members. Indonesia’s case is the most immediate. On February 19, just one day before the Supreme Court ruling, Jakarta signed a reciprocal trade agreement with Washington on the sidelines of Trump’s Board of Peace meeting.
Under the deal, Indonesia committed to eliminating tariffs on 99% of American goods, removing non-tariff barriers and lifting export restrictions on critical minerals. Indonesian and US companies also reached 11 commercial deals worth US$38.4 billion. In return, the US set tariffs on Indonesian goods at 19% – down from the original “Liberation Day” rate of 32%.
The Philippines had earlier negotiated its rate from 20% to 19%, while Cambodia and Malaysia received the same 19% rate. These were not treaties ratified by the US Senate; they were executive arrangements based on presidential authority that the Supreme Court has now found unlawful.
As Justice Kavanaugh noted in his dissent, the ruling’s impact on existing trade deals – including those with the UK, China and Japan – is a significant concern the majority of the Court left unaddressed.
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The 10% pivot and its limitsTrump’s immediate response – announcing a new 15% global tariff under Section 122 of the Trade Act of 1974 – signals the administration’s intent to maintain tariff pressure through alternative legal avenues.
Section 122 is designed for balance-of-payments emergencies and caps tariffs at 15% for up to 150 days without congressional approval. This is a considerably narrower authority than IEEPA provided. In nearly every country that signed a deal at a rate above 15%, the new baseline is actually lower than the negotiated rate.
Treasury Secretary Scott Bessent has argued that alternative authorities will produce “virtually unchanged tariff revenue” in 2026, but the structural constraints of these statutes – time limits, procedural requirements, judicial review – are real.
Section 301 investigations, Section 232 national security tariffs and Section 122 emergency duties each come with checks that IEEPA did not. The administration has also signaled it will initiate multiple Section 301 investigations and has indicated it does not intend to voluntarily process refunds on the estimated US$160 billion in IEEPA duties already collected, leaving that question to further litigation.
The message from the Trump administration is clear: even if the legal ceiling has dropped, it intends to use procedural friction and alternative mechanisms to exert as much pressure as possible on trading partners.
Where does this leave ASEAN?Southeast Asian governments now face a strategic, yet uncertain, choice.
They can treat their concessions – zero tariffs on US goods, agricultural purchases, critical minerals access – as still binding, in the hope of preserving goodwill with an administration that may yet find new legal tools to reimpose higher rates. Or they can treat the ruling as a reset of the negotiating table, leveraging the legal uncertainty to revisit some of what they offered.
The US-ASEAN Business Council’s characterization of the ruling as adding “uncertainty and confusion” rather than being a “deal breaker” for regional economic ties is probably the right framing, at least in the short term.
ASEAN governments are pragmatic actors. They understand that the US market is not going anywhere, and that antagonizing Washington over a legal technicality – however significant – carries its own risks.
But pragmatism cuts both ways. If the Trump administration cannot credibly threaten tariff rates above 15% without congressional cooperation, the calculus underpinning these deals has materially shifted.
It is also worth noting the broader context. Indonesia’s trade agreement was announced alongside President Prabowo Subianto’s participation in the Board of Peace and his commitment to deploy up to 8,000 troops to the Gaza stabilization force.
Except for Cambodia, which already signed a trade agreement with the US, Vietnam joined the Board of Peace most likely as a way to seek more favorable trade arrangements with Washington.
These linkages suggest that trade negotiations have become intertwined with a wider set of diplomatic and security commitments – a dynamic that complicates any simple unwinding of individual tariff agreements.
A window, not a resolutionThe broader picture is one of a temporary shift in leverage. The Tax Foundation estimates that the IEEPA tariffs, had they remained in place, would have shrunk US GDP by 0.3% and were projected to raise US$1.4 trillion over the next decade.
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Their removal provides immediate relief – but the Section 232 tariffs on steel, aluminium and autos remain, and Section 301 investigations could restore targeted pressure on specific sectors.
For ASEAN countries, the ruling is neither a full reprieve nor a return to the pre-2025 trading environment. What it offers is breathing room – a period in which the asymmetry of bargaining power is somewhat reduced, and in which ASEAN governments can reassess what they are willing to offer and at what price.
The domestic political picture in Washington adds a further layer of uncertainty. Despite strong reaction from Trump and his administration, which included calling the majority justices a “disgrace to our nation” and Vice President JD Vance labeling the decision “lawlessness from the court,” congressional Republicans are visibly split.
Senator Rand Paul praised the ruling as being “in defense of our Republic”, while Senator McConnell stated there was “no room for doubt” that the IEEPA tariffs were illegal. If the administration wants to reimpose tariff rates above 15%, it will need congressional cooperation from a caucus that is not united behind the policy.
For ASEAN governments trying to gauge how durable Washington’s tariff posture will be, this internal fracture matters as much as the legal technicalities.
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