The recent ruling by the US Supreme Court has significant implications for trade between the United States and India. The court declared that former President Donald Trump’s tariffs on India, which had set an 18% reciprocal tariff on many imports, were illegal. This decision means that 55% of India’s exports to the US will no longer face these tariffs.
Trade experts, like Ajay Srivastava from the Global Trade Research Initiative, believe this is a critical moment for India. Without the reciprocal tariffs, many Indian products will only have to deal with standard Most-Favored-Nation (MFN) tariffs, which are generally lower. This ruling could also lead to more favorable conditions for Indian exporters in the future.
However, not all tariffs have been removed. Tariffs under Section 232, which affect steel, aluminum, and certain auto parts, will still remain in place. According to reports, products like smartphones, petroleum, and medicines will have some exemptions but still face scrutiny.
The ruling raises questions about the future of trade agreements. It may make existing deals seem less beneficial for partner countries, which could lead them to reconsider their trade arrangements with the US. News outlets in the US suggest that Congress may take a more active role in shaping trade policy moving forward, signaling a shift in how trade is managed at the federal level.
Market reactions have been positive. Following the ruling, Indian stock indices saw a notable rise, indicating optimism among investors. Ajay Bagga, a market expert, noted that the ruling may also influence how the Trump administration approaches future tariffs.
The Supreme Court’s decision highlights the limits of presidential power over trade, emphasizing Congress’s role in deciding such matters. Chief Justice John Roberts mentioned that the president cannot impose tariffs unilaterally without proper legal backing.
In summary, while the ruling brings hope for Indian exporters by removing some tariffs, uncertainties remain. The landscape of international trade is changing, and this legal clarity could reshape future agreements. You can read more about the implications of these tariffs in details from the Global Trade Research Initiative and The New York Times.
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