A COALITION of small US businesses, led by V.O.S. Selections, Inc, filed suit in the US Court of International Trade (CIT) on 14 April 2025, challenging the legality of the reciprocal and fentanyl related tariffs imposed by US President Donald Trump under the International Emergency Economic Powers Act of 1977 (IEEPA).
This filing represents the first major CIT challenge to Trump-era tariffs imposed under IEEPA. Recently, on 09 Jan 2026, the Supreme Court released its first set of opinions of 2026, but did not issue a ruling on the legality of Trump’s IEEPA-based tariffs.
“Thus far, the Supreme Court has not announced a specific date for issuing its ruling on the IEEPA-based tariffs. However, a decision must be issued by the end of the Court’s current term in June 2026, at the latest,” said Hong Leong Investment Bank (HLIB).
Scenario analysis:
Scenario 1: Supreme Court upholds President Trump’s use of IEEPA. Should the Supreme Court decline to rule against Trump’s use of IEEPA to impose tariffs, the glove sector’s demand-supply dynamics should remain broadly consistent with our 2026 outlook report published on 14 January 2026.
Scenario 2: Supreme Court rules the IEEPA-based tariffs unlawful. Should the Supreme Court ultimately declare the tariffs imposed by President Trump’s administration unlawful, the reciprocal and fentanyl-related tariffs would have to be repealed, with the following implications, in our view:
(a) China: Total tariffs on medical and surgical rubber gloves would fall from 120% (100% Section 301 + 10% universal tariff under IEEPA + 10% fentanyl tariff under IEEPA) to 100% (Section 301 only), leaving Chinese glove makers still uncompetitive for US distributors compared to ASEAN peers, in our opinion.
(b) SEA: Key glove-producing countries would see US tariffs on medical and surgical rubber gloves decrease to 0% from 19-20% (Malaysia, Thailand, Indonesia and Vietnam).
Despite the reduction, HLIB believes that no single ASEAN country gains a clear advantage within the region given the symmetric tariff reduction, though they remain more competitive than Chinese peers.
“Should President Trump explore alternative statutory tariff pathways to sustain his tariff agenda, we expect front-loading activities by US glove distributors across ASEAN in the ensuing months, while the fifth option will maintain the status quo,” said HLIB.
HLIB thinks that investors should not interpret this demand spike as a structural demand recovery, as purchasing activities may normalise in the following months.
Stripping out short-term front-loading distortions, the underlying supply–demand balance in the glove sector remains broadly aligned with our 2026 outlook report.
“Based on the above scenario analysis, while Scenario 2 could trigger a short-term demand spike via front-loading activities, we do not expect this to reignite longer-term investor positioning in the glove sector. Structural supply pressures remain the primary concern over the mid- to long-term,” said HLIB.
Accordingly, HLIB maintain our NEUTRAL stance on the sector. Following the sustained share price correction since early 2025 for the three glove makers under our coverage, we believe the market has largely priced in both near- and long-term challenges. All three companies are rated HOLD. —Jan 20, 2025
Main image: The Vibes
