US Supreme Court Strikes Down Trump’s Tariff: Big Win for India and the 900 Billion Dollar Question

Trump Tariff Ruling: A massive upheaval has shaken US politics and the global economy. The United States Supreme Court has declared the emergency tariffs imposed by President Donald Trump’s administration as illegal. This ruling is not just an internal US matter; it is set to bring significant changes to global trade equations, including those of India. Experts believe this verdict creates a highly advantageous position for India in the ongoing trade tug-of-war with the US.

The 900 Billion Dollar Question Mark

Following the Supreme Court’s ruling, a unique situation has emerged in the US economy. The Trump administration had claimed that these tariff policies generated approximately $900 billion for the government treasury. This massive amount was collected primarily from importers and consumers, which consequently drove up prices in the market.

Now, the burning question is: since the court has declared this tax collection illegal, will this $900 billion have to be refunded?

• Risk of Economic Disaster: If the government is forced to refund this colossal amount, it could spell an economic disaster for the US economy.
• Governors’ Demand: Governors from various US states have already started demanding that these illegally collected taxes be immediately refunded to the citizens.

Relief for India and New Opportunities

This ruling is crucial for India-US trade relations. The Trump administration had alleged that India imposes up to 52% tariffs on American products. In retaliation, the US imposed a 26% tariff on India, which was later hiked to 50%, and finally settled at 18% after negotiations.

India’s Position in Trade Pact:
Officials from both countries were scheduled to begin a three-day negotiation from February 23 to finalize an ‘Interim Trade Pact’. With the Supreme Court’s verdict arriving right at this juncture, the US’s bargaining power has significantly weakened.

• India can now negotiate from a much stronger position.
• Countries that haven’t yet signed a final deal with the US will also be able to take a more aggressive stance at the negotiating table.

Legal Battle and Trump’s Future Moves

In the 9-judge bench of the Supreme Court, 6 judges ruled against Trump. The court clarified that under the ‘International Emergency Economic Powers Act’ (IEEPA), the President does not have the authority to impose such global tariffs using executive powers. However, it is believed that the Trump administration will not give up easily.

According to experts, Trump still has a few options left:

• Citing National Security: Trump could argue that tariffs imposed by other nations are a threat to US ‘National Security’ and attempt to reimpose tariffs on these grounds.
• Emergency Measures: He might consider new emergency moves to challenge or bypass the court’s limitations.

This ruling has left countries like South Korea, which had already signed trade deals, in limbo. A climate of extreme uncertainty has enveloped global trade, with everyone watching closely for America’s next move.