US Supreme Court Verdict No Hurdle for India-US Trade Deal, President Donald Trump Assures

New Delhi: The US Supreme Court has canceled the sweeping global tariffs imposed by President Donald Trump, but Trump has said that it will not affect the India-US trade agreement and the deal will continue as it is. The Supreme Court ruled with a majority that the President does not have the authority to impose tariffs under the International Emergency Economic Powers Act of 1977, but Trump has made it clear that India will still have to pay import duties and the existing trade arrangement is not going to change.

What decision did the Supreme Court give?

The Supreme Court ruled by a 6–3 majority on February 20 that the sweeping tariffs imposed by the Trump administration based on the IEEPA are not lawful. The court explained that the law does not give the president the power to impose such sweeping tariffs and that the decision falls within the jurisdiction of Congress. 

What will happen to India-US trade agreement?
Despite the Supreme Court's decision, Trump has said that there will be no change in the ongoing trade agreement with India and it will continue. He described trade as “fabulous” and said the current 18 percent tariff regime would remain in place. This means that India will still have to pay duty at the same rate and the agreement between the two countries will not be affected. 

What has changed in the tariff rate?

It has also come to light in some reports that after the decision of the Supreme Court, under the new White House decree, the tariff rate applicable to Indian goods has started decreasing from 18 percent to about 10 percent, although this new system is currently going to be implemented and further discussion on its rules is going on.

Will the Supreme Court's decision impact broader business?

Analysts say that this decision of the Supreme Court is a big blow to Trump's comprehensive tariff agenda. The court limited the jurisdiction of the president, due to which questions have been raised on the legality of tariffs implemented not only in India but also with other countries. There remains uncertainty in the global business community as to how conditions will evolve further.

What was Trump's strong reaction?

Trump reacted sharply to the court after the decision and said that the decision was “shameful”. He indicated he may try to reimpose the tariffs through alternative legislation. In this sequence, he has also issued an order to impose a new 10 percent global tariff, due to which there is a possibility of further upheaval in trade policy.  

How was India's reaction?

India has not yet issued a detailed official statement on the Supreme Court decision, but the Commerce Ministry has said that it is studying the decision and further policy will be considered based on the US response. Indian exporters are also eyeing the new trade arrangement.

What will be the impact on relations after the tariff dispute?

Experts believe the challenge will be in striking a balance between a court decision and the administration's response. The long-term partnership between India and America appears strong, but confusion over trade policy and tariffs has raised new questions on the relationship between the two countries.