Trump announces 10% global tariff within 3 hours of US Supreme Court's decision to strike down tariffs, global markets in turmoil, what impact will this have on India
Washington/New Delhi. Within three hours of the US Supreme Court's decision to strike down tariffs, Donald Trump announced a 10% global tariff across the world. The United States Supreme Court declared President Donald Trump's global tariffs unconstitutional by a 6-3 majority. However, within just three hours of the decision,
Earlier reports said that Trump invoked Section 122 and announced a new 10% additional tariff on countries worldwide. This development has not only sparked debate within the US constitutional system but also created a stir in the global business world.
Earlier reports said that Trump stated that this tariff would be on top of the baseline tariff already in place. This means that this new 10% extra tariff would be added to the current tariff.
But a White House official later stated that countries that have trade agreements with the US, including Britain, India, and the European Union, will now face a 10% global tariff under Section 122, rather than the tariff rate they had previously negotiated. This will reduce the total tariff on India from 18% to 10%.
What is Section 122? How the tables turned
Just three hours after the Supreme Court's setback, the Trump administration issued a new order, citing Section 122 of the Trade Act of 1974. This provision empowers the president to impose temporary tariffs of up to 15% in the event of an extraordinary trade deficit, with a time limit of up to 150 days.
Using this authority, Trump announced the imposition of an additional 10% tariff. While this move is temporary, its impact could be widespread. Experts believe it is a tactic to technically circumvent the court's decision.
Tariffs struck down by a 6-3 majority, what did the court say?
The US Supreme Court clarified in its decision that under Article 1 of the Constitution, the prerogative to impose taxes and tariffs rests with Congress, not the President. The Court held that the President's imposition of a comprehensive global tariff violates the principle of separation of powers.
In a 6-3 decision, the majority of justices held that making such sweeping economic decisions through executive order is beyond constitutional scope. With this decision, all tariffs imposed on other countries automatically became illegal, including the 18% reciprocal tariff imposed on India.
Trump lashes out at judges, call them a "disgrace to the country"
President Trump reacted sharply immediately after the decision. He said that judges lack the courage to make decisions in the national interest and are acting under pressure from foreign powers. Trump also claimed that the court is trying to block his economic agenda despite the overwhelming public support he received in the 2024 election.
Trump said that reducing America's growing trade deficit is his priority and he will not back down from this goal. He argued that without a strict tariff policy, America cannot protect its domestic industry and employment.
Global markets in turmoil, what impact will this have on India?
Trump's latest move has caused volatility in international markets. Asian and European markets recorded initial declines. There are fears of renewed tensions in US trade relations with India, China, and the European Union.
While India is relieved that the Supreme Court's decision struck down the 18% reciprocal tariff, a new 10% tariff will remain in effect temporarily. This could increase pressure on export-dependent industries, particularly the textile, auto parts, and pharmaceutical sectors.
This could also impact the global supply chain. This 150-day period has brought strategic uncertainty for multinational companies, which could impact investment and production decisions.
US collected $200 billion in tariffs, but the issue of refunds remains in limbo
The Trump administration has collected more than $200 billion in tariffs since the beginning of last year. Following the Supreme Court's decision, a major question has arisen regarding the refund of this amount.
It is unclear whether the government will be required to return the money collected to companies. The Trump administration had previously stated that if the case were lost, it could have to withdraw trade agreements with several countries and pay substantial refunds.