US tariffs: The Supreme Court of the United States delivered a shocking decision on Friday (IST) and struck down the reciprocal tariffs imposed by the Donald Trump administration. The tariffs had brought on global economic tensions, diplomatically strained ties, and were even used by the US President on multiple occasions as a tool to strike deals.
Meanwhile, according to IANS, the White House said that countries that struck trade deals with US, including India, the United Kingdom, the European Union (EU), and others, will temporarily face a uniform 10 per cent tariff following the Court’s decision restricting the administration’s use of emergency tariff powers under the International Economic Emergency Powers Act (IEEPA).
From 50% to 18% to 10%
The US administration has imposed a 10 per cent ad valorem import duty on articles imported into the United States.
The temporary 10 per cent import duty will take effect on February 24 at 12:01 a.m. Eastern Standard Time. Notably, certain goods will not be subject to the temporary import.
After the SC’s ruling, Trump signed a Proclamation imposing a temporary import duty. According to ANI, he is invoking his authority under section 122 of the Trade Act of 1974, which empowers the President to address certain fundamental international payment problems through surcharges and other special import restrictions.
What is section 122?
Section 122 authorises the US president to impose temporary tariffs of up to 15 per cent for a maximum of 150 days to address what the law describes as “large and serious” US balance-of-payments deficits – situations where imports significantly exceed exports.
Meanwhile, the tariffs imposed under Section 122 automatically expire after 150 days unless Congress votes to extend them.
India-US trade deal
Regarding the India-US trade deal that was announced recently, US President Trump has said that a trade framework with India would remain intact despite the Supreme Court ruling. He insisted that “nothing changes” for the New Delhi trade deal and described Prime Minister Narendra Modi as “a great gentleman, a great man actually”.
IANS reported that when asked at a news conference about “the framework which is to be signed with India sometime soon”, Trump replied, “Nothing changes, nothing changes, they’ll be paying tariffs, and we will not be paying tariffs.”
Trump added, “Our deal with India is that they pay tariffs. This is a reversal from what it used to be. As you know, India, and I think Prime Minister Modi is a great gentleman, a great man actually, but he was much smarter than the people that he was against in terms of the United States.”
Global tariff of US
After the ruling, Trump announced in a post on Truth Social that the “global tariff” of 10 per cent on all countries has been signed and will be effective “almost immediately.”
“It is my Great Honor to have just signed, from the Oval Office, a Global 10% Tariff on all Countries, which will be effective almost immediately,” the US President wrote in the post.
This announcement means that the SC decision has brought an end to Washington’s country-specific tariffs, lowering them to a uniform and lower percentage.
Moreover, in practical terms, the shift from high-percentage country-specific tariffs to a flat 10 per cent global duty means US trade policy has moved, at least temporarily, from coercive bargaining to a uniform market.
Countries that had faced sharply higher penalties, or the risk of them, are now facing the same baseline rate.
(with agencies’ inputs)
