SINGAPORE/WASHINGTON, Feb, 29, 2026 – Southeast Asian governments are reassessing whether to renegotiate trade understandings struck under threat of steep US tariffs after the Supreme Court curtailed President Donald Trump’s ability to impose broad duties under emergency powers, shifting Washington’s leverage toward a time-limited global surcharge and slower investigations.
The US Supreme Court ruled on Feb. 20 that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, striking at the legal foundation of Trump’s earlier “instant” tariff threats against both allies and rivals.
In response, the White House invoked Section 122 of the Trade Act of 1974 to impose a temporary import surcharge, initially set at 10%, for up to 150 days unless extended by Congress. Trump has since said the global rate would rise to 15%, the maximum permitted under Section 122, according to Reuters.
“Uncertainty” becomes the baseline”
Singapore Deputy Prime Minister Gan Kim Yong described the post-ruling environment as defined by “uncertainty,” Bloomberg reported in its Singapore Edition newsletter on Feb. 28, capturing a regional concern that legal constraints in Washington may not translate into policy stability.
Several Southeast Asian countries moved quickly in recent months to lock in tariff arrangements or frameworks amid US threats of duties that, in some cases, were publicly discussed as reaching into high double digits, Bloomberg reported. The court decision removed the administration’s ability to deploy that particular tool on demand, but did not end the underlying pressure to keep bilateral understandings intact.
US Trade Representative Jamieson Greer has said he is not seeing countries move to withdraw from tariff deals and that Washington is seeking “continuity,” while pursuing other legal routes to enforce or replicate prior commitments.
Greer has said prospective Section 301 investigations could cover “most major trading partners” and include topics such as industrial excess capacity, pharmaceutical pricing practices, and discrimination against US firms, among others. In practical terms, that approach replaces immediate tariff threats with a process-driven enforcement pathway that can still result in targeted duties, but typically after months of investigation.
Incentive geometry: why Southeast Asia may still “stick with the deal”
The ruling has created a new bargaining structure for Southeast Asia:
- Authority risk (US side): The administration’s fastest path to broad tariffs narrowed with the IEEPA ruling, increasing reliance on time-limited or investigatory tools.
- Time risk (both sides): Section 122’s 150-day clock pressures Washington to sequence investigations quickly, while partners weigh whether reopening deals now would create exposure to new probes later.
- Reputation and investment risk (ASEAN side): Even with reduced “instant tariff” leverage, governments and firms face the cost of prolonged uncertainty in supply-chain planning and foreign investment decisions.
Bloomberg reported that economists at Maybank Securities estimate the tariff advantage of ASEAN over China has narrowed but that the “China+1” manufacturing diversification logic remains intact, even if relative tariff differentials shrink.
Legal aftershock: refund claims add pressure
The decision has also opened the way for a major refund fight over duties collected under the invalidated IEEPA tariff program. Reuters reported that roughly 2,000 importers have filed suits and that refund exposure estimates run into the hundreds of billions of dollars in some scenarios, with courts expected to play a central role in determining next steps.
That litigation overhang matters for partners because it increases the administration’s incentive to replace lost revenue and rebuild negotiating leverage through alternative tariff authorities.
Key uncertainties for Southeast Asia and Cambodia specifically include:
- Scope and sequencing of Section 301 investigations: whether rice, seafood, or industrial overcapacity concerns move from broad issue categories into formal, country-linked dockets.
- Congressional appetite to extend Section 122 tariffs: Section 122 requires legislative action for continuation beyond the statutory limit, and analysts have questioned whether an extension is politically feasible.
- How bilateral “deal” terms interact with the surcharge: whether any exemptions or carve-outs are preserved, renegotiated, or overridden as the tariff architecture changes.
For Southeast Asia, the court ruling did not end the tariff era; it changed its mechanics. The immediate question for regional capitals is whether reopening politically costly concessions now yields meaningful tariff relief or whether maintaining existing commitments offers the safer path in a system that has shifted from executive shock to administrative grind.
