Trump’s ‘much ado about nothing’? From 50% to flat 10% — How court ruling brings change in US trade strategy | World News
US tariffs: The US Supreme Court on Friday (IST) made a shocking decision, striking down the reciprocal tariffs imposed by the Donald Trump administration. Tariffs have led to global economic tensions, diplomatically strained relations, and have even been used as a tool to make deals by the US President on multiple occasions.
Meanwhile, according to IANS, the White House said countries that have trade deals with the US, including India, the UK, the European Union (EU) and others, will temporarily face a single tariff of 10 per cent following the Court’s decision restricting the administration’s use of emergency tariff powers under the International Economic Emergency Powers Act (IEEPA).
50% to 18% to 10%
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The US administration imposed a 10 percent value-based import tax on goods imported into the US.
The 10 percent temporary import duty will go into effect on February 24 at 12:01 a.m. Eastern Standard Time. It is also noteworthy that some goods will not be subject to temporary import.
After the SC decision, Trump signed a Proclamation imposing a temporary import duty. According to ANI, he is exercising his authority under section 122 of the Trade Act, 1974, which empowers the President to resolve certain basic international payment issues through surcharges and other special import restrictions.
What is episode 122?
Section 122 authorizes the U.S. president to impose temporary tariffs of up to 15 percent for a maximum of 150 days to address situations in which imports significantly exceed exports, which the law defines as “large and serious” U.S. balance of payments deficits.
Meanwhile, tariffs imposed under Section 122 will automatically expire after 150 days unless Congress decides to extend them.
India-US trade agreement
Regarding the India-US trade deal announced recently, US President Trump said that the trade framework with India will remain intact despite the Supreme Court decision. He insisted that “nothing has changed” in the New Delhi trade deal and called Prime Minister Narendra Modi “a great gentleman, a great man in fact”.
IANS reported that Trump responded to a question about the “framework to be signed with India soon” at a press conference by saying, “Nothing changes, nothing changes, they will pay customs duty, we will not pay customs duty.”
Trump added: “Our deal with India is that they pay tariffs. This is a rollback to what it was before. India, as you know, and I think Prime Minister Modi is a great gentleman, a great man actually, but from the perspective of the United States, he was a lot smarter than the people he was against.”
US global tariff
Following the decision, Trump announced in a post on Truth Social that a 10 percent “global tariff” for all countries had been signed and would go into effect “almost immediately.”
“It is my great honor to recently sign from the Oval Office the 10% Global Tariff to all Countries, effective immediately,” the US President wrote in his post.
This announcement means that the SC decision puts an end to Washington’s country-specific tariffs, reducing them to a uniform and lower percentage.
Moreover, in practical terms, the shift from high-percentage country-specific tariffs to a flat 10 percent global tax means that U.S. trade policy has shifted, at least temporarily, from coercive bargaining to a uniform market.
Countries that faced or risked much higher penalties now face the same base rate.
(with input from agencies)
Also Read- US tariffs on Indian goods reduced from 18% to 10% after US Supreme Court ruling
