Introduction: A World in Transition
Global trade is at a turning point. The world is moving away from a system dominated almost exclusively by the United States toward a more fragmented, multipolar order. The recent federal appeals court ruling striking down Donald Trump’s sweeping tariffs has added to the uncertainty. While those duties remain temporarily in effect pending appeal, the decision represents a serious challenge to the idea that Washington can impose unilateral tariffs on its trading partners whenever it chooses.
At the same time, Asian giants—China, India, and Russia—are strengthening alliances through platforms like the Shanghai Cooperation Organisation (SCO). These moves highlight how global power is shifting toward Eurasia, especially as trade tensions and tariff wars reshape supply chains and political alliances.
In this blog, we’ll explore what the U.S. tariff setback means, how Asian blocs are rising, and why these trends together mark a fundamental rewriting of global economic power.
Part 1: The Collapse of Trump’s Tariff Architecture
The Appeals Court Ruling
On August 29, 2025, a 7–4 ruling by the U.S. Court of Appeals for the Federal Circuit declared that Trump had exceeded his legal authority when he used the International Emergency Economic Powers Act (IEEPA) to impose blanket tariffs on nearly all imports. Traditionally, tariffs fall under the purview of Congress, not unilateral executive action.
The ruling doesn’t immediately end the tariffs—they remain in place until October 14 while the government seeks a Supreme Court appeal—but it delivers a serious blow to the notion that the president can declare an “economic emergency” to reshape global trade flows single-handedly.
Why It Matters
- Legal Precedent: If upheld, the ruling sets a landmark precedent limiting executive power in trade.
- Financial Stakes: Businesses that paid billions in duties could seek refunds exceeding $150 billion.
- Geopolitical Implications: Without the ability to impose unilateral tariffs, the U.S. may lose one of its most visible weapons in trade negotiations.
Part 2: U.S. Trade Policy in Disarray
Tariffs Still in Place (For Now)
Though the appeals court struck them down, Trump’s tariffs are still operational under a temporary stay. Importers must keep paying duties on Chinese goods, European exports, and products from countries like India.
Potential Outcomes
- Supreme Court Review: If the Court upholds the appeals court, tariffs vanish overnight.
- Refund Chaos: The government might owe refunds stretching into the tens of billions, straining fiscal policy.
- Alternate Paths: Washington could try narrower measures under the Trade Act of 1974 or Section 232 (national security grounds), but these are limited in scope.
The Political Dimension
Trump built much of his political identity on being tough on trade. Losing the tariff tool not only weakens his leverage with partners like China but also reshapes domestic politics—where tariffs have long been framed as protecting American workers, even if they raised consumer prices.
Part 3: The Rise of Asia’s Counterweight
While Washington grapples with legal and political battles, Asia is moving in the opposite direction—strengthening cooperation to reduce reliance on U.S.-dominated systems.
The SCO Summit in Tianjin
At the 2025 SCO Summit, Xi Jinping hosted Narendra Modi and Vladimir Putin, projecting an image of unity among Asia’s three major powers.
Key themes included:
- Expanding trade in local currencies rather than U.S. dollars.
- Building infrastructure corridors linking Central Asia, South Asia, and Russia.
- Coordinating defense and cybersecurity policies as an alternative to NATO.
Multipolar Currency Ambitions
One of the SCO’s most ambitious proposals is the use of a common settlement platform for member states, reducing exposure to U.S. sanctions. This reflects broader trends: Russia sells oil to India in rupees, China promotes the yuan in Belt and Road trade, and even Middle Eastern economies are diversifying currency reserves.
Part 4: India’s Balancing Act
India’s presence in both U.S.-led alliances (like the Quad) and Asia-centric blocs (like the SCO) highlights the country’s unique role. Facing a 50% U.S. tariff on its exports, New Delhi has reason to strengthen Eurasian ties.
At the same time, India remains wary of China, especially after recent border clashes. For Modi, the SCO summit was about hedging bets: staying engaged with China and Russia while keeping lines open with Washington.
This balancing act demonstrates how U.S. tariff policies may backfire by pushing India—the world’s fifth-largest economy—toward deeper cooperation with rivals.
Part 5: Global Supply Chains in Flux
The combination of U.S. tariff instability and Asian coordination is reshaping global supply chains:
- Diversification Away from U.S. Markets
Exporters from India, China, and Southeast Asia are increasingly pivoting to intra-Asian trade and Eurasian corridors. - Energy Realignment
Russia, under sanctions, is redirecting oil and gas exports eastward—to India and China. This not only deepens partnerships but also weakens the West’s energy leverage. - Technology Blocs
Competing frameworks for 5G, AI, and digital governance are dividing the world into Western and Eastern systems. Countries are being forced to choose sides—or, like India, straddle both.
Part 6: The Decline of Dollar Hegemony?
Perhaps the most profound consequence of these shifts is the slow erosion of the U.S. dollar’s dominance. Tariffs and sanctions, once powerful tools of American influence, have accelerated efforts by countries to seek alternatives.
- China promotes the yuan as a reserve currency.
- Russia demands energy payments in rubles or yuan.
- SCO countries explore cross-border digital currency systems.
If successful, these initiatives could reduce Washington’s ability to wield sanctions and tariffs as global weapons—fundamentally altering the balance of economic power.
Part 7: Fault Lines Within the Asian Bloc
While the optics of unity are strong, real challenges remain:
- India-China Rivalry: Border tensions and competition for influence in South Asia create distrust.
- Russia’s Weakness: A sanctions-hit Russian economy risks making Moscow the “junior partner” in the alliance.
- Uneven Benefits: Smaller SCO members like Uzbekistan or Kyrgyzstan may feel overshadowed by giants.
These tensions suggest that while the SCO is a credible counterweight, it is not a seamless alliance like NATO.
Part 8: What This Means for the U.S.
Risks
- Loss of Leverage: Without tariffs as a bargaining chip, U.S. negotiators may struggle to extract concessions.
- Isolation: Asian countries may deepen ties within their own blocs, leaving Washington on the sidelines.
- Economic Costs: Businesses and consumers face uncertainty from shifting tariff policies and global supply chains.
Opportunities
- Rebuild Alliances: The U.S. could pivot back toward multilateral frameworks like the WTO to regain credibility.
- Engage India More Deeply: Offering trade incentives could pull New Delhi closer to Washington.
- Focus on Innovation: Leading in technology, clean energy, and AI could give the U.S. long-term competitive advantage.
Conclusion: A New Trade Order Emerging
The world is at a crossroads. On one side, the U.S. faces the unraveling of its unilateral tariff strategy and the limits of executive power. On the other, Asia is building coalitions designed to rewrite the rules of trade, energy, and security.
The outcome will not be decided overnight. Legal battles in Washington, border disputes in Asia, and economic realities will shape the next decade. But the trajectory is clear: the era of uncontested U.S. dominance is fading, and a multipolar trade order is rising in its place.
For businesses, policymakers, and ordinary citizens, this means a future defined by complexity, shifting alliances, and opportunities beyond traditional Western markets. Those who adapt early—diversifying supply chains, engaging with Asia, and preparing for currency realignment—will thrive in this new world.