Trump Tariffs Struck Down by Supreme Court, Global Trade in Flux

First, he introduced a set of "reciprocal tariffs" last year that forced several countries to scurry for inking trade deals with Washington or agree to negotiations as the dice appeared to be loaded against them.

"After the US President tore up the global economic order in 2025, Japan was one among the countries scrambling to strike a deal. They pledged to dramatically increase investment in the US in exchange for lower US tariffs on Japanese exports," observed the UK's liberal-leaning 'The Guardian' newspaper.

"But two days after Trump's declared victory, his bid to reshape international trade suffered a damaging defeat at the US Supreme Court," it added.

On February 20, the US Supreme Court, in a 6-3 judgment, ruled that President Trump overstepped his authority when he imposed global tariffs using the International Emergency Economic Powers Act (IEEPA). The court clarified that IEEPA was designed for national security emergencies, not broad trade measures. This effectively struck down many of Trump's earlier "reciprocal tariffs".

True to his style, with contempt towards judges who ruled that much of his tariff regime was illegal, Trump soon announced a 10 per cent global tariff, then quickly raised it to 15 per cent by invoking Section 122 of the Trade Act of 1974.

While it allows the US President to impose this import duty, it is a temporary adjustment for a maximum of 150 days. This provision is meant to be used to address balance-of-payments deficits, and needs to be extended by Congress.

With mid-term elections looming ahead this year, the House may not want to vote in a hurry.

Meanwhile, businesses and trading partners face confusion about what tariffs apply, making long-term planning difficult. But the dynamics have shifted, with allies feeling confident that they can renegotiate a few clauses.

India, Brazil, and China have been handed significant tariff cuts without making a single compromise, The Guardian report said, adding that at the same time, countries like the UK may now face higher tariffs, despite making concessions.

New Delhi has hit the pause button on the ongoing negotiation before an imminent closure of a trade deal. Exporters in India are alarmed, especially in the textiles, chemicals, and auto parts sectors.

The European Union, too, is seeking clarifications after the European Commission had reached an understanding in an initial trade deal with Washington. According to reports, Brussels wants to consult the WTO and has warned of possible countermeasures.

Agricultural exporters in Brazil are reportedly worried about higher costs, where President Luiz Inacio Lula da Silva, while in Delhi, urged countries to unite and form collective negotiating blocs for talks with the US.

Meanwhile, President Xi Jinping of China will carry some extra leverage when he sits at the negotiating table across his US counterpart during the latter's Beijing visit from March 31 to April 2. China's Ministry of Commerce this week said that it has noted the US Supreme Court's ruling and is conducting a comprehensive assessment of its relevant content and impact.

The unilateral measures, it added, such as the imposition of reciprocal tariffs and fentanyl tariffs, not only violate international economic and trade rules but also contravene domestic laws of the United States, and are not in the interests of any party.

Trump may not now be able to push Xi for larger purchases of American soybeans, Boeing aircraft, and energy.

China may go slow on allowing a steady flow of rare earth minerals, a crucial component of the American hi-tech and AI-based manufacturing. Some reports are already hinting at Beijing attempting retaliation. But that may wait till the Xi-Trump Beijing summit.

- IANS