Businesses across Asia have reacted with caution rather than celebration after the US Supreme Court invalidated a central pillar of President Donald Trump’s sweeping tariff policy, a decision that has injected fresh uncertainty into trade relations with the world’s largest consumer market.
The court’s ruling last week found that the emergency powers law used to justify the tariff regime did not authorize the wide-ranging levies imposed by the administration, effectively nullifying billions of dollars in duties. However, any sense of relief was short-lived. Within hours of the decision, Trump signed a new executive order imposing a 10% global tariff under separate legislation that allows temporary import taxes without congressional approval. He later signaled the rate could rise to 15%, though official documents showed the 10% duty remained in place after no further directive was issued.
For exporters and manufacturers in Asia, the rapid policy shifts have compounded an already volatile environment. Push Sharma, founder of Singapore-based wellness brand Haldy, said his company had spent years laying the groundwork to enter the US market, including trademark registrations and distributor negotiations. Those plans were abruptly deferred last year after the initial wave of tariffs created what he described as a “very drastic” shift in the business climate. The Supreme Court ruling, followed by the swift reimposition of new tariffs, has done little to restore confidence.
Analysts say the core issue is not necessarily the tariff rate itself, but the unpredictability surrounding US trade policy. Companies embedded in complex Asian supply chains are now being forced to make long-term investment decisions without clarity from Washington. Dan Ives of Wedbush Securities noted that firms are struggling to determine whether to relocate supply chains or adjust sourcing strategies without knowing what the final rules will be.
The uncertainty has been felt acutely over the past year. Since the first round of tariff announcements in April, manufacturers have reported rising costs and disrupted orders. Tomi Mäkelä, general manager of Thailand’s Lanna Clothing, described the initial announcement as a severe blow. Some clients renegotiated contracts or canceled shipments altogether amid fears of higher duties. With margins tightening, he said price increases are becoming unavoidable.
Pricing challenges have also complicated Haldy’s strategy. Without knowing the final landed cost of goods in the US, Sharma said it is nearly impossible to set competitive retail prices. Other business leaders echo the sentiment, arguing that companies can adjust to known cost increases but struggle when policies appear to shift without warning.
Trade officials have offered limited clarity. During a recent address, Trump criticized the court’s decision and insisted tariffs would remain in place under alternative legal frameworks, though he provided few specifics. US Trade Representative Jamieson Greer later indicated that higher tariffs could be introduced “where appropriate,” but did not identify which countries might be affected.
The ripple effects extend beyond manufacturers to logistics providers. DHL said businesses are navigating a more complex operating environment, with unresolved questions about potential refunds for previously collected duties. Niki Frank, chief executive of DHL Global Forwarding Asia-Pacific, said it remains unclear how any reimbursement process would function. Rival delivery giant FedEx has filed a lawsuit seeking a full refund of emergency tariffs, stating it is taking action to protect its rights as an importer of record.
Meanwhile, China’s dominant position in regional manufacturing continues to loom large. Tariffs tied to country-of-origin rules still apply regardless of where a company is headquartered, making it difficult to bypass Chinese supply chains entirely. Sharma noted that Haldy’s turmeric mints and packaging are produced in China, meaning they remain subject to a 25% tariff. At the same time, reduced US demand has left some Chinese factories operating below capacity, prompting them to raise prices for regional customers.
China’s scale and efficiency remain formidable advantages. While Southeast Asian exporters could benefit if companies diversify production away from China, lower tariffs on Chinese goods could undermine their competitiveness. Mäkelä expressed concern that Chinese manufacturers, able to produce at significantly larger volumes and lower costs, may ultimately gain ground.
As Asian firms reassess their strategies, some are pivoting to new markets. Haldy has expanded operations in Malaysia and is exploring opportunities in the Middle East, while Lanna Clothing is increasing its focus on Canada, Australia and Europe. For many businesses, the priority has shifted toward controlling what they can in an unpredictable global trade landscape.
Despite the legal setback to Trump’s original tariff framework, the broader trade environment remains unsettled. For companies across Asia, the Supreme Court’s decision has not resolved uncertainty but instead ushered in a new phase of strategic recalibration as they brace for further policy shifts from Washington.
