The 6-3 ruling by Chief Justice Roberts represents one of the most consequential separation-of-powers decisions in recent memory. The Court held that IEEPA does not authorize the President to impose tariffs, grounding its decision in Article III of the Constitution. Supreme Court of the United States The doctrinal basis is significant: the Court reasoned that tariffs are a form of taxation, and under Article I of the Constitution, the power to tax belongs exclusively to Congress. Al Jazeera
The majority invoked the Major Questions Doctrine, which holds that Congress must explicitly authorize policies of major national impact. The ruling noted that before Trump, no president had ever used IEEPA to impose any tariffs, let alone tariffs of this magnitude and scope. NBC News Crucially, the majority concluded that Trump’s legal stance “would represent a transformative expansion of the President’s authority over tariff policy.” CNBC
The dissent, written by Kavanaugh (joined by Thomas and Alito), took a more deferential view of executive power in foreign affairs — but the majority’s cross-ideological composition (Roberts writing, with the three liberal justices concurring on distinct grounds) signals a durable institutional consensus against unilateral executive tariff authority under emergency law.
II. Trade Policy Implications
The ruling has fractured the architecture of Trump’s trade agenda in two important ways.
IEEPA tariffs invalidated: IEEPA tariffs represented about half of all the import taxes the government was collecting each month. Other tariffs were issued under different statutes and are not being challenged. NPR
Trump’s legal workaround: Trump’s first move was imposing a 10% “global tariff” under Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% for up to 150 days to address trade deficits. After 150 days, Congress would need to approve any extension. He subsequently raised this to 15%. Yahoo Finance The administration is also leveraging Section 232 (national security) and Section 301 (unfair trade practices) authorities. Treasury Secretary Scott Bessent estimated that using these alternative authorities “will result in virtually unchanged tariff revenue in 2026.” CNBC
The refund question is economically enormous: the Treasury Department collected $269.1 billion in tariff revenues through January 2026, and a potential refund of ~$175 billion (per the Penn Wharton Budget Model) would imply close to one quarter of a trillion dollars of effective economic stimulus, pushing the budget deficit up by approximately half a percentage point of GDP. Real Economy
Negotiated trade deals face uncertainty: the big incentive for doing trade deals with the Trump administration — getting a lower reciprocal tariff rate before competitors — has now vanished, reducing the incentive for trade partners to comply with their part of the deal. Al Jazeera The EU, for instance, has signaled it may freeze ratification pending clarity.
III. Market Reactions
Markets interpreted the ruling not as relief but as a new source of volatility, since Trump’s pivot to alternative tariff instruments preserved aggregate tariff levels while introducing legal uncertainty. US stock futures sank early Monday: Dow futures dropped 0.6%, S&P 500 futures fell 0.7%, and Nasdaq 100 futures declined around 0.9%. Yahoo Finance European markets followed suit, with the FTSE 100, DAX, and CAC 40 all retreating. The pound showed modest resilience, trading slightly above $1.35.
The market logic is clear: the ruling did not lower tariffs — it merely changed their legal vehicle. And the 150-day sunset on Section 122 tariffs introduces a congressional approval cliff, adding a fresh layer of legislative and political uncertainty ahead of the 2026 midterms.
IV. Implications for Singapore
Singapore’s exposure is both direct and structural, and PM Lawrence Wong’s earlier characterisation — “if the tariffs were truly reciprocal and meant to target only those with trade surpluses, then the tariff for Singapore should be zero” Fortune — remains the sharpest framing of Singapore’s grievance, given that the US runs a trade surplus with Singapore.
Several vectors of risk are relevant:
Direct tariff exposure: Singapore’s baseline tariff was set at 10% under the IEEPA regime, and the new Section 122 tariff of 15% — effective February 24 — technically represents a worsening of the direct tariff rate, despite the constitutional drama surrounding its predecessor.
Semiconductor sector: Singapore is among the Southeast Asian nations for which semiconductors make up a sizeable proportion of exports, meaning Trump’s threatened 100% tariff on semiconductor imports from non-US manufacturers would have profound implications for growth forecasts. Sidley Austin LLP
Systemic/structural risk: PM Wong’s parliamentary statement identified Singapore’s deeper concern not as direct bilateral impact, but as the erosion of the rules-based multilateral order. He warned that capital and trade will increasingly be diverted based on political alignment and strategic considerations rather than economic efficiency — and that if US-China disputes escalate further, “the consequences for the world would be disastrous.” Prime Minister’s Office Singapore For a small, open, trade-dependent economy like Singapore, this systemic risk is arguably more consequential than any specific tariff rate.
China’s regional adjustment: Beijing has sought to offset losses in the US market by strengthening trade ties with Southeast Asian nations Al Jazeera — a development that could benefit Singapore as a regional trading hub, but also risks drawing it into US-China geopolitical crossfire.
Summary Assessment
The SCOTUS ruling is constitutionally significant as a reassertion of Congressional primacy in tariff policy, but its practical trade policy effect is limited: Trump has successfully migrated to alternative legal instruments with comparable revenue outcomes. The 150-day clock on Section 122 is the key near-term variable — it creates a congressional pressure point that could either institutionalise or unwind the new tariff regime. For Singapore, the transition from IEEPA to Section 122 offers no relief and possibly worsens the direct rate, while the deeper threat remains the progressive dismantling of the WTO-anchored trade architecture that undergirds Singapore’s entire economic model.