Don't bet on the court: Tough US trade policy shifts are here to stay

The United States (US) Supreme Court has fast-tracked its hearing in a case challenging President Donald Trump’s authority to level sweeping tariffs on America’s trade partners. In general, the Court hears cases over a lengthy period and announces judgments in the summer. But this one, it appears, might be concluded sooner than that. The most recent series of verbal arguments last week did not appear to be going well for the lawyers defending the executive’s right to set tariffs under an authorisation, dating back to 1977, that says that emergency trade measures do not have to be referred to the legislature. Constitutionally, the right to set tariffs — and all taxes — is retained by the United States Congress, but Mr Trump has used the decades-old emergency authorisation to effectively overturn America’s longstanding trade policy. 

For various and disparate reasons, a majority of the nine judges on the Supreme Court Bench seem to be sceptical of this action — including many crucial conservative ones appointed by Mr Trump himself. Certainly, the President himself appears a little rattled. On Sunday, he took to his social network, Truth Social, to condemn critics of his tariff policy as “fools” who did not recognise that the US was now “the richest, most respected country in the world, with almost no inflation, and a record stock market price”. He added that “businesses are pouring into the USA only because of tariffs”, and questioned whether his own lawyers had told the Supreme Court this. 

This internal dispute within the US is of obvious interest to the rest of the world, particularly those countries whose economies have been overset by higher than expected tariffs. It is no secret that some of them, including European ones, would be glad to have the powers to tariff and impose unequal trade relations taken out of the President’s hands and returned to Congress, which at least might be capable of being lobbied and persuaded. India, however, occupies a special position in this discussion — as the country that has had the highest rate of tariffs imposed on it, and as one that has not been able to come to a firm conclusion to negotiations on a trade agreement that allows those tariff rates to be reduced or circumvented. There will be a temptation to delay settling a final deal until the Supreme Court decides. This is in the hope that any agreement will be rendered unnecessary by American judges. And if some agreement is in fact reached, it will be similarly tempting to imagine that a judicial decision that goes against the White House will allow for a return to the status quo ante in trade relations. 

But any such hope is likely to be belied. The fact is that judges anywhere are loath to go against the political tide, as expressed by voters through an electoral mandate. And if they do, in this case, they will run up against an executive perfectly capable of side-stepping and even ignoring a court order. Even if Mr Trump is told not to use his emergency powers, he is not likely to give up on his quest to impose trade restrictions on those countries that he believes are exploiting US generosity — of which, he has made amply clear, he considers India a particularly egregious example. There are other, probably legal, routes for him to pursue this effort — Section 301 of the Trade Act is just one legal clause that India has been exposed to in the past, but there are others. This may not be a battle that the judges will win, and New Delhi should not bet on them doing so.