US Supreme Court Decision on Trump's Tariffs

The United States Supreme Court's decision to overturn former President Donald Trump's global tariffs has significant implications for US-India trade relations.

Impact on India-US Trade

• The removal of tariffs will benefit approximately 55% of India's exports to the US, which were previously subjected to an 18% duty. These exports will now only face standard Most-Favoured Nation (MFN) tariffs.
• Certain tariffs will remain: 
  • Section 232 tariffs: 50% on steel and aluminum, and 25% on certain auto components.
• Products accounting for roughly 40% of export value, such as smartphones, petroleum products, and medicines, will remain tariff-exempt.

US Supreme Court Ruling

• The court ruled that Trump overstepped his authority by imposing tariffs under the International Emergency Economic Powers Act (IEEPA), a law meant for national emergencies.
• Chief Justice John Roberts clarified that IEEPA does not permit unilateral tariff actions without congressional approval.

Recent Developments

• Following the ruling, a joint statement was issued on an interim trade agreement between India and the US.
• The US has already removed some punitive tariffs on India as a gesture of goodwill, motivated by India's agreement to cease purchasing oil from the Russian Federation.

Future Implications

• The ruling may render recent US trade deals with countries like the UK, Japan, EU, and others ineffective, as partner countries might reconsider their validity.
• Trump could attempt to reimpose similar tariffs under different sections, but these require new investigations and could face legal challenges.
• The decision reinforces Congress's role in trade policy, limiting presidential power to use tariffs as a broad enforcement tool.