The US Supreme Court's ruling striking down president Donald Trump's reciprocal tariffs could mean about 55% of India's exports to the US would be free from the 18% duty. According to media reports quoting Ajay Srivastava, Founder, Global Trade Research Initiative these exports would be subjected only top standard Most Favoured Nation tariffs.
The average US Most Favoured Nation tariff on Indian goods is approximately 2.8% to 3.3%. However it varies across sectors.
For those not aware the MFN tariffs are the base rates the US applies to all World Trade Organisation members. The average US MFN tariff on Indian goods is approximately 2.8% to 3.3%, which varies across sectors.
According to the reports Srivastava added: "The ruling should prompt India to re-examine its trade deal with the United States."
The Supreme Court ruled that Trump overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) to impose his “reciprocal” tariffs across the globe.
The Court said tariff power belongs to Congress, and the IEEPA can't be stretched to justify sweeping trade duties.
According to NBC, the ruling was authored by Chief Justice John Roberts.
The 6-3 decision centres on tariffs imposed under an emergency powers law, including the sweeping “reciprocal” tariffs he levied on nearly every other country.
"The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration and scope," Roberts wrote. But the Trump administration "points to no statute" in which Congress has previously said that the language in IEEPA could apply to tariffs, he added.
The tariffs decision doesn't stop Trump from imposing duties under other laws. While those have more limitations on the speed and severity of Trump's actions, top administration officials have said they expect to keep the tariff framework in place under other authorities.
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