US Appeals Court Ruling Trump Tariffs Unconstitutional Can Bring Relief To Global Economy

By Siti Noor Afera Abu

KUALA LUMPUR, Aug 30 (Bernama) -- The ruling by a United States (US) federal appeals court declaring most of President Donald Trump’s tariffs illegal could bring relief to the global economy by easing cost pressures on businesses and restoring demand. 

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said tariffs have proven to be ineffective in addressing trade deficits or attracting investment into the US.

“This development is a positive sign, as it shows the judiciary playing its role to correct policies that can be detrimental to the economy.

“If tariffs are rolled back, US companies may not have to bear the additional costs, which in turn can improve global trade sentiment,” he told Bernama.

On Friday, the US Court of Appeals for the Federal Circuit, in a 7-4 ruling, affirmed that Trump had exceeded his authority by using emergency economic powers to impose broad-based tariffs on nearly all trading partners. 

However, the judges allowed the duties to remain in place until mid-October to give time for a possible appeal to the US Supreme Court.

Universiti Sains Islam Malaysia economist Associate Prof Dr Nuradli Ridzwan Shah Mohd Dali, however, said the situation remained uncertain, as the US administration could appeal the case or adopt alternative policy measures.

“If Trump accepts the decision, tariffs will revert to normal, and Malaysian exports will not face additional costs. But if he appeals and the tariffs remain, our products will be a bit more expensive, and the same goes for other products from other countries,” he said.

Nuradli cautioned that even if the appeal failed, Washington might pursue other policy responses, keeping trade partners exposed to uncertainty.

On Aug 26, the Ministry of Investment, Trade and Industry (MITI) stated that Malaysia remained in an overall competitive position despite the tariff rates imposed on the country by the United States.

MITI said that the government’s decision not to take retaliatory action but to pursue prudent negotiations has yielded pragmatic and balanced results.

On July 31, 2025, the US announced the imposition of reciprocal tariffs on Malaysia at a rate of 19 per cent, effective Aug 8, 2025.

-- BERNAMA