U.S. Tariff Policy Shift Following Supreme Court Ruling: Thailand Monitors Impact and Prepares Strategic Response

U.S. Supreme Court Limits Presidential Authority to Impose Global Tariffs

On 20 February 2026, the Supreme Court of the United States issued a significant ruling in Learning Resources, Inc. v. Trump by a 6–3 majority. The Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the U.S. President to impose broad global import tariffs.

The Court reasoned that the imposition of tariffs constitutes a fiscal power that is constitutionally vested in the United States Congress rather than the executive branch.

As a consequence, the Court invalidated the Reciprocal Tariff measure previously implemented under IEEPA. The decision could potentially result in the refund of tariffs already collected, estimated at approximately USD 175 billion.

U.S. Introduces Temporary Global Tariff under Trade Act of 1974

Following the ruling, the U.S. President issued a proclamation on the same day invoking authority under Section 122 of the Trade Act of 1974 to impose a temporary import surcharge of 10% on goods imported from all countries for a period of 150 days, citing concerns related to balance-of-payments pressures.

The measure took effect on 24 February 2026. However, on 21 February 2026, the President announced an increase in the tariff rate to 15%, the maximum level permitted under Section 122, effective immediately.

This temporary tariff measure replaces the Reciprocal Tariff framework but includes exemptions for certain strategic goods, including:

• Certain critical minerals
• Metals used in currency and bullion
• Energy and energy products
• Certain agricultural products
• Pharmaceuticals and pharmaceutical ingredients
• Certain electronics
• Passenger vehicles, certain light trucks, medium- and heavy-duty vehicles, buses, and related parts
• Certain aerospace products

Potential Impact on Thailand

The Vice Chairman of the Thai Chamber of Commerce stated that the U.S. court decision does not disrupt the ongoing trade negotiations between Thailand and the United States. Instead, the ruling provides greater legal clarity regarding U.S. trade policy.

From a commercial perspective, the new tariff rate of 15% is lower than the effective tariff rate of approximately 19% previously faced by Thai exports. Consequently, the short-term impact on Thai exporters is expected to be manageable.

In addition, the temporary nature of the measure may create short-term export opportunities, as U.S. importers may accelerate purchases during the 150-day implementation period in anticipation of potential policy changes.

Nevertheless, Thailand may still need to address longstanding U.S. concerns in several areas, including:

• Production cost structures
• Government subsidies
• Anti-dumping issues
• Labour standards
• Environmental standards
• Food safety regulations
• Intellectual property protection

These issues may become increasingly relevant in the context of future trade policy reviews.

Thai Government Response

The Prime Minister has instructed the Thailand–U.S. trade negotiation team, including the Deputy Prime Minister and Minister of Finance, together with the Minister of Commerce, to closely monitor developments following the transition from the Reciprocal Tariff framework to the 15% global tariff measure.

While the reduced tariff rate may provide short-term benefits for Thai exports, policymakers recognize the possibility of further U.S. trade measures and will continue to maintain close bilateral engagement.

Thailand’s Strategic Response

To mitigate potential risks and strengthen economic resilience, Thailand is pursuing several strategic initiatives.

1. Continued Engagement with U.S. Trade Authorities

Thailand will continue discussions with the Office of the United States Trade Representative (USTR) to safeguard Thai export interests and manage potential tariff risks.

2. Expansion of Free Trade Agreements (FTAs)

The government is accelerating negotiations on free trade agreements in order to diversify export markets and reinforce Thailand’s position as a regional trade and investment hub.

Current priorities include:

• Implementation of FTAs with Sri Lanka and the European Free Trade Association (EFTA), which have already been signed and are awaiting domestic approval
• Targeting the conclusion of FTA negotiations with South Korea and the European Union by 2026
• Advancing trade cooperation between the Association of Southeast Asian Nations (ASEAN) and Canada

3. Support Measures for Businesses

The Ministry of Commerce has established a consultation centre to provide guidance to businesses affected by evolving global trade policies.

4. Investment Promotion and Supply Chain Relocation

Thailand is also working to remove regulatory barriers to investment in order to attract supply-chain relocation into Thailand and the broader ASEAN region.

The Prime Minister has tasked the Office of the Council of State of Thailand with accelerating legal reforms affecting investors, while the Thailand Board of Investment continues to expedite investment approvals under the Board of Investment (BOI) Fast Pass policy.

Author: Panisa Suwanmatajarn, Managing Partner.

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