US Supreme Court Tariff Ruling Boosts Market Confidence, Seen Positive for Malaysia’s Economy
KUALA LUMPUR: Malaysia’s economic outlook and financial markets could benefit from improved global sentiment following a US Supreme Court ruling that limits President Donald Trump’s authority to impose tariffs without Congressional approval, economists said.
Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said the court decision signals that institutional checks and balances remain effective in the United States, helping to reduce uncertainty around global trade policy.
He said while the Trump administration may still pursue protectionist measures, the ruling suggests that such policies could face delays and legal scrutiny, easing downside risks to global economic growth.
“This would allow the global economy to grow at a higher rate, which will benefit an open economy like Malaysia,” he said, noting that Malaysia’s exports grew by 19.6% in January 2026, exceeding expectations.
Dr. Mohd Afzanizam added that global financial markets are likely to welcome the ruling, potentially supporting Malaysia’s equities and bond markets, while the ringgit could strengthen against the US dollar.
Economist Dr. Nungsari Ahmad Radhi said the ruling clarifies that tariffs are effectively taxes and cannot be imposed unilaterally by the US president without legislative approval.
He said tariffs introduced through executive orders would continue to face legal challenges, creating uncertainty around trade arrangements. The court decision also means tariffs collected under the invalidated measures may need to be reimbursed.
The Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA) on Feb 20, including Trump’s reciprocal tariffs. In response, the US administration introduced a temporary 10% global tariff under Section 122 of the Trade Act of 1974, which is limited to 150 days.
IPPFA Sdn Bhd director of investment strategy Mohd Sedek Jantan said the ruling does not alter existing trade agreements or market access for Malaysia but changes the legal framework under which tariffs are imposed.
He said the temporary global tariff is unlikely to significantly affect Malaysia’s competitiveness, as it applies uniformly to all exporting countries.
“Malaysia will not lose relative competitiveness, and any impact is likely to be limited to short-term margin pressures or pricing adjustments,” he said, adding that Malaysia’s diversified export base and strong role in global supply chains would help cushion the impact.
Hong Leong Investment Bank noted that the temporary 10% tariff represents a reduction from the earlier reciprocal tariff rate of 19%, which could support near-term export momentum. Sectors such as electronics manufacturing services, gloves, and selected technology companies are expected to benefit.
Malaysia’s Ministry of Investment, Trade and Industry said it is monitoring developments and reviewing the implications of the ruling and the temporary tariff measures.
Investment, Trade, and Industry Minister Datuk Seri Johari Abdul Ghani said the government is studying the scope and potential impact of the US measures and is awaiting further clarity on implementation.
Economists said Malaysia should engage closely with US authorities to clarify exemptions, timelines, and product coverage, while also supporting exporters through trade finance and working capital assistance.
They also urged Malaysia and ASEAN to strengthen regional supply chain integration and maintain policy stability to reinforce the region’s position as a reliable manufacturing hub.