Centre monitoring US Supreme Court case against Donald Trump tariffs

Indian officials and experts are monitoring the US Supreme Court case challenging Donald Trump's tariff powers, assessing how the verdict may affect the proposed India-US trade agreement

Indian officials and experts are closely monitoring the US Supreme Court case, challenging American President Donald Trump’s tariffs, and are trying to make an assessment whether there will be an impact on the proposed India-US trade deal that is being negotiated.

 

During a hearing last week, Supreme Court justices expressed scepticism about Trump’s ability to impose tariffs on several countries around the world. Questions were also raised whether an emergency law gives Trump the power to set and change duties on imports. While according to the Constitution, Congress has the power to levy tariffs, but, in a first, the Trump administration has argued that an emergency law allowing the President to regulate importation also includes tariffs.

 

Earlier this year in April, the US administration announced that it plans to impose sweeping tariffs on most countries by calling the US's burgeoning trade deficit a national emergency.

 

According to an Indian government official, negotiators from both sides have been factoring in the case. Any action will depend on the final verdict. “We will see that. Every other country is the same. There are mechanisms under which we will cover the processes. That is a possibility that both sides are considering,” the official said.

 

Trade and industry experts warned that even if the US Supreme Court rules against the President, he may still push forward with tariff measures, and may use other statutes to target trade partners, despite judicial limits.

 

“Eventually, even if the judgment does not go in Trump’s favour, he is still likely to impose tariffs in some form or the other. Tariffs remain Trump’s favourite policy instrument and I don't see a situation where they would not be used against countries (including India),” an industry official said.

 

“The real question is whether India can get the Trump administration to look beyond its core interest in agriculture. This perhaps can be done by offering a stronger deal in manufacturing or services, which makes him look at things differently,” Trade Economist Biswajit Dhar said, suggesting that for now, India should wait and watch for the outcome.

 

According to Delhi-based think tank Global Trade Research Initiative (GTRI), if the US Supreme Court strikes down Trump’s use of emergency powers, forcing the withdrawal of his “Liberation Day” tariffs, the ruling would reverberate far beyond American borders. “The decision would unravel the foundation of several recently negotiated trade arrangements with key partners such as the EU, Japan, South Korea, and the UK — all of which were struck under the shadow of those tariffs and premised on reciprocal concessions,” GTRI said in a report last week.

 

It would also disrupt ongoing talks with India, where tariff leverage has shaped Washington’s negotiating position, the report said.

 

Meanwhile, in an interview, Trump had last week said that revoking tariffs would be “devastating for our country”, and warned that the entire world would be in a depression had he not been able to impose tariffs on trading partners.

 

(With inputs from agencies)