Why Trump’s tariff case Is a make-or-break moment for the US economy

IN a White House gathering on 3 September 2025, President Donald Trump delivered a stark warning: if the Supreme Court upholds last week’s appeals court decision striking down his broad tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the United States could “suffer so greatly” and be forced to “unwind” newly forged trade deals with the European Union, Japan, South Korea, and others.

AI Brief

A court ruling challenges Trump's use of emergency powers for tariffs, potentially shifting trade authority back to Congress.
If upheld, the decision could disrupt trade deals and revenue, with experts warning of global market instability.
Critics argue the case tests the limits of presidential power in trade, with long-term implications for US governance.

At first glance, this sounds hyperbolic. But beneath the rhetoric lies a heart‑of‑the‑matter truth: this legal battle centres on the very fabric of U.S. executive power in trade. The appeals court’s 7‑4 ruling held that Trump exceeded his authority under IEEPA—a statute crafted for national emergencies, not sweeping economic restructuring.

Should the Supreme Court refuse to reverse that verdict, Congress—not the president—will reclaim the reins over tariffs, a core legislative prerogative. And that shift isn’t hypothetical. It threatens the lifeline of projected tariff revenues—70% of 2026’s haul—and imperils the architecture of recently struck trade arrangements.

Trump’s argument isn’t unfounded. Treasury Secretary Scott Bessent has warned of economic chaos if the ruling stands—potentially requiring refunds of hundreds of billions in duties, unsettling foreign negotiations, and triggering a cascade of uncertainty in global markets.

But is the threat of “unwinding” deals more posturing than policy? Trade experts caution that such agreements were, in reality, framework arrangements—fluid, adjustable, and always subject to renegotiation. The suggestion that they’d collapse completely isn’t convincing; rather, it appears tailored to heighten pressure on the justices.

Moreover, critics decry the strategy as legally shaky and politically destabilising. Senator Ron Wyden, ranking Democrat on the Senate Finance Committee, accused the administration of sowing confusion, questioning whether any trade framework can stand if its backbone—tariffs—can be invalidated.

That bickering masks what’s at stake: the enduring debate over executive power in trade policymaking. Letting the Trump administration proceed unchecked would tilt the balance toward circumventing Congress, weakening the constitutional separation of power.

The stakes couldn’t be higher. A Supreme Court ruling in favour of Trump would affirm sweeping executive discretion. A ruling against him could reassert legislative authority—but also destabilise markets and diplomatic ties.

Ultimately, Trump’s case isn’t just about money or deals. It’s a referendum on the scope of presidential power. And the world—watching this high-stakes showdown—knows that what’s decided here will ripple for generations.

Phar Kim Beng, PhD, is Professor of ASEAN Studies and Director of the Institute of Internationaliation and ASEAN Studies (IINTAS) at the International Islamic University Malaysia.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.