The US Supreme Court decision invalidating country-specific tariffs by the Trump administration will free about 55% of India’s exports to America from the reciprocal tariffs that are to be brought down to 18% from 25% as part of a trade deal, according to a trade policy think tank.
The 55% Indian exports will now be subject to only standard MFN tariffs, founder of Global Trade Research Initiative Ajay Srivastava said.
On the remaining exports, (i) Section 232 tariffs will continue — 50% on steel and aluminium and 25% on certain auto components. The products accounting for roughly 40% of export value, including smartphones, petroleum products and medicines, will remain exempt from US tariffs.
The ruling renders the trade deals the US has entered into on the back of the extra levies useless and it should prompt India to re-examine its trade deal with the US, he said.
“Partner countries may now find reasons to dump these deals. Trump could attempt to reimpose similar tariffs under Section 301 or Section 232, but those statutes require new investigations and public justification, delaying action and inviting further legal challenges,” he said
Also, such measures cannot serve as a universal enforcement tool. The ruling should prompt India to re-examine its trade deal with the United States.