Trade deal weeks away, India to wait & watch Trump next steps, Pg3

Key Highlights:

• The US Supreme Court ruled that President Donald Trump overstepped his powers under the International Emergency Economic Powers Act (IEEPA) in imposing reciprocal tariffs.
• The ruling could invalidate reciprocal tariffs, potentially leading to demands for refunds of customs duties collected by the US government, estimated at $108 billion by October 2025, including $487 million from India.
• India has entered into an interim trade deal with the US and is awaiting further action from the US government following the Supreme Court ruling.
• The Trump administration may resort to other means, such as Section 232 and Section 301, to impose tariffs on countries.

Detailed Insights:

• The Supreme Court's decision could unravel trade arrangements negotiated with key partners like the EU, Japan, South Korea, and the UK, which were based on reciprocal concessions under the threat of tariffs.
• The IEEPA, passed in 1977, had been broadly interpreted as granting US presidents emergency powers, but the Court order changes that interpretation, potentially reducing volatility in trade relations.
• With the legal powers under IEEPA in question, the Trump administration has increased the use of Section 232 tariffs on products like aluminum, cars, steel, and timber.
• Section 232 tariffs, while less sweeping than IEEPA tariffs, provide stronger legal cover due to the "national security" element, and are imposed equally on all countries, not hurting competitiveness.
• The US administration could also use Section 122, allowing the president to impose tariffs of up to 15% for up to 150 days, or Section 301, granting the ability to impose focused tariffs on targeted countries and select industries.

Key Concepts Involved:

• International Emergency Economic Powers Act (IEEPA): A US law passed in 1977 granting the President authority to regulate international commerce during a national emergency.
• Section 232: A provision in US trade law allowing tariffs on imports that threaten national security.
• Section 301: A provision in US trade law allowing tariffs or other trade restrictions on countries that engage in unfair trade practices.