India gains as US cuts tariff to 10% after Supreme Court blow to Trump

New York/Washington, Feb 21: India now faces a lower tariff rate of 10%, down from 18%, after US President Donald Trump announced a new global levy on items imported into America in the wake of the Supreme Court verdict against his sweeping tariffs.

In a proclamation titled “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems”, Trump said he is imposing, for a period of 150 days, a "temporary import surcharge of 10% ad valorem" on articles imported into the United States, effective February 24.

Given this new tariff rate of 10%, which will be applicable on countries around the world, Indian goods being imported into the US would no longer be subject to the 18% tariff rate that had been decided on following the announcement of a framework for an Interim Agreement on trade between India and the US.

In a major setback to Trump's pivotal economic agenda in his second term, the US Supreme Court, in a 6-3 verdict written by Chief Justice John Roberts, ruled that the tariffs imposed by Trump on nations around the world were illegal and that the President had exceeded his authority when he imposed the sweeping levies.

Earlier this month, as the US and India announced they reached a framework for an Interim Agreement on trade, Trump issued an Executive Order removing the 25% punitive tariffs imposed on India for its purchases of Russian oil, with the US president noting the commitment by New Delhi to stop directly or indirectly importing energy from Moscow and purchasing American energy products.

Under the trade deal, Washington would charge a reduced reciprocal tariff on New Delhi, lowering it from 25% to 18%.

Trump signed the proclamation "imposing a temporary import duty to address fundamental international payments problems and continue the Administration's work to rebalance our trade relationships to benefit American workers, farmers, and manufacturers".

Trump lashed out at the Supreme Court justices who ruled against him, calling them "fools and lapdogs".

"The Supreme Court's ruling on tariffs is deeply disappointing, and I'm ashamed of certain members of the Court, absolutely ashamed for not having the courage to do what's right for our country," Trump said in a news conference at the White House on Friday, just hours after the verdict came in.

When asked whether the framework for an interim agreement on trade with India, expected to be signed soon, stands in the wake of the Supreme Court ruling, Trump said "nothing changes".

"Nothing changes. They'll be paying tariffs, and we will not be paying tariffs. So deal with India is they pay tariffs. This is a reversal for what it used to be, as you know, India and I think Prime Minister Modi is a great gentleman, a great man, actually, but he was much smarter than the people that he was against in terms of the United States, he was ripping us off. So we made a deal with India. It's a fair deal now, and we are not paying tariffs to them, and they are paying tariffs. We did a little flip," Trump said.

To another question on his relationship with India, he said "I think my relationship with India is fantastic and we're doing trade with India. India pulled out of Russia. India was getting its oil from Russia. And they pulled way back at my request, because we want to settle that horrible war where 25,000 people are dying every month," Trump said.

He said his relationship with Prime Minister Modi "is, I would say, great". Trump then went on to repeat the claim that he stopped the war between India and Pakistan using tariffs.

PTI