US SC Scraps Trump Tariffs: Is This A Game Changer For India-US Trade Deal?

The US apex court on Friday, February 20, ruled against the US President Donald Trump's imposition of tariffs under a law reserved for national emergencies, signalling fresh negotiation strategies in play linked to the India-US trade deal.

With a 6-3 majority ruling, the US Supreme Court struck down Trump’s Liberation Day tariffs on products entering the United States, dubbing it 'illegal' and not allowed under the International Emergency Economic Powers Act (IEEPA).

Reacting to the apex court’s ruling, Trump called the ruling a “disgrace” during a White House breakfast with US governors.

US Tariff Removal: The Impact On India-US Trade Pact?

While the US slashed the levy on India to 18% from 50%, effectively removing the 25% punitive tariffs, the SCOTUS verdict legally scrapped the basis for the original tariff imposition.

The US top court's decision laid a blanket of confusion on the workings of India-US trade deal, especially after both countries agreed upon the interim trade pact framework.

Notably, the US import duty under Section 232 still continue impacting sectors such as steel, aluminum, and automobiles.

Also Read: US SC Ruling Against Liberation Day Tariffs: ⁠What Will Trump Do Next?

Meanwhile, India's position is further solidified on the negotiations table with the United States. Earlier, the Union Commerce and Industry Minister Piyush Goyal said the interim trade agreement between India and the United States is likely to become operational in April this year.

On the other hand, Neil Bradley, Executive Vice President and Chief Policy Officer at the US Chamber of Commerce, said, "We encourage the administration to use this opportunity to reset overall tariff policy in a manner that will lead to greater economic growth, larger wage gains for workers, and lower costs for families."

“The Supreme Court’s decision is welcome news for businesses and consumers. Swift refunds of the impermissible tariffs will be meaningful for the more than 200,000 small business importers in this country and will help support stronger economic growth this year," he said.