How does the US Supreme Court ruling impact Thai exporters?

Although a recent US Supreme Court ruling declared President Donald Trump’s use of emergency powers to impose certain tariffs unconstitutional, Thai exporters are expected to see only a temporary reprieve from trade pressures.

In a landmark ruling on February 20, 2026, the U.S. Supreme Court struck a major blow to the executive branch’s trade powers, a decision with immediate and significant consequences for Thai exporters.  

The court’s decision invalidated levies under the International Emergency Economic Powers Act (IEEPA), yet the US administration has swiftly countered with a new 10% global tariff under the Trade Act of 1974. Consequently, Thai industry leaders and government officials warn that trade policy remains highly volatile, urging businesses to diversify their export markets to mitigate the impact of “tariff stacking” and persistent American protectionism.

Key Points

• Supreme Court Ruling : In a 6–3 decision, the US Supreme Court ruled that the executive branch overstepped its authority by using the IEEPA to levy tariffs, a power constitutionally reserved for Congress.
• Limited Impact : The ruling only applies to tariffs imposed under the IEEPA, which represent approximately half of the tariff revenue collected since last year; other duties under Sections 301 and 232 remain in place.
• Immediate Countermeasures : Following the ruling, the White House announced a new 10% global tariff on all imported goods for a 150-day period, utilizing Section 122 of the Trade Act of 1974.

The implications of the US Supreme Court ruling for Thai exporters are significant and multifaceted

1. Short-term Relief from IEEPA Tariffs

• The ruling declared that former President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs was unconstitutional. This provides some immediate relief from tariffs that were imposed under this law, which accounted for a substantial portion of tariff revenue.

2. Legal Clarity and Reduced Uncertainty

• The decision enhances legal clarity regarding the authority to impose tariffs, which may reduce uncertainty for Thai exporters. This could lead to a more stable trading environment in the short term, making it easier for businesses to plan and operate.

3. Continued Trade Barriers

• Despite the ruling, the Trump administration has announced a new 10% global tariff on imports. This means that while some tariffs may be lifted, others could be introduced or maintained, continuing the pressure on Thai exporters.

4. Impact on Negotiations

• The ruling may influence ongoing negotiations between Thailand and the US regarding tariff reductions. Thailand is actively seeking to negotiate lower tariffs in exchange for purchasing US goods, which could be more favorable in light of the legal ruling.

While the Supreme Court ruling offers some relief and clarity for Thai exporters, the landscape remains complex and uncertain. Businesses must navigate ongoing trade barriers and adapt their strategies to mitigate risks associated with fluctuating US trade policies.

Potential for Tariff Refunds

One of the most complex implications for Thai businesses and their U.S. partners is the issue of restitution.  

• Revenue at Stake: The U.S. government collected an estimated $264 billion in total tariff revenue in 2025.  
• The Process: Because the Court ruled these tariffs were illegal from the start, Thai exporters (or the U.S. importers of record) may be entitled to refunds for duties already paid. However, the Court did not provide a specific mechanism for these payouts, and the U.S. administration has signaled that the refund process could take years.

The Pivot to “Section 122” and New Risks

While the IEEPA-based tariffs were struck down, the trade war has not ended; it has simply shifted legal grounds.  

• New 10% Global Tariff: In response to the ruling, the administration immediately invoked Section 122 of the Trade Act of 1974. This allows for a 10% global tariff for a limited period (150 days) to address balance-of-payment deficits.  
• National Security Tariffs: The ruling does not affect tariffs imposed under Section 232 (National Security), such as those on steel and aluminum. Thai exporters in these specific sectors will see no change in their current tariff rates.  

The Supreme Court ruling provides some relief and clarity for Thai exporters, yet the landscape remains intricate and uncertain. Businesses must still tackle persistent trade barriers and adjust their strategies to manage risks tied to unpredictable US trade policies.

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