Trump had made tariffs a central pillar of his economic and foreign policy agenda. Shortly after starting his second term, he imposed tariffs under emergency powers legislation originally intended for national crises.
In April, under what he called “Liberation Day” tariffs, a 10% base duty was imposed on all imports into the United States, along with additional country-specific tariffs ranging from 15% to 50%. Although some of these were later renegotiated and reduced, the broader tariff framework remained in place.
The tariffs were expected to generate trillions of dollars in revenue over the next decade. However, they also sparked a global trade war, strained ties with key trading partners and contributed to increased volatility in global financial markets.
The Supreme Court’s ruling effectively dismantles the legal basis for these sweeping levies. This development could be a potential turning point in global trade dynamics, especially for export-oriented economies and multinational companies that had adjusted their supply chains around the tariff regime.
For India, the ruling comes at a crucial time as broader markets are grappling with volatility due to Fed uncertainty and the slump in IT stocks. Earlier this month, India and the United States reached an interim trade deal aimed at easing tariff tensions. Under that arrangement, the US agreed to reduce reciprocal tariffs on Indian goods to 18%, while India committed to lowering certain tariffs and non-tariff barriers on US imports. That agreement had already provided some relief to Indian markets, which were under continued pressure due to uncertainties in global trade.
Now that the broader tariff framework has been scrapped, the landscape could change again. It remains unclear how the US government will respond and whether new trade measures could be introduced under various legal provisions.
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