In a major blow to US President Donald Trump, US Supreme Court struck down the tariffs he imposed worldwide by a 6-3 majority. The court stated that the Constitution grants the authority to impose tariffs to Congress, not the executive branch. Thomas Jefferson, America’s third president and one of the country’s founding fathers, said, “If we want to prevent those in power from doing mischief, we must chain them to the Constitution.” As usual, Trump is furious, even going so far as to say the decision is “shameful” and that the judges acted against the national interest.
The major issue is the refund, estimated to be between $130-142 billion and $175 billion. The court has not issued a decision on this matter, and the matter will remain entangled for years. An enraged Trump has imposed tariffs on everyone, first 10% and then 15%. The Constitution gives him the authority to impose tariffs of up to 15% for 150 days.
But the world won’t see any relief just yet. Experts warn that Trump will try to find some way to demonstrate his power. He could go to Parliament, but given the unpopularity of tariffs in the US, this is unlikely. However, as Varg Folkman of the European Policy Centre has also said, “This will create significant uncertainty in global trade, as everyone will try to determine US policy.” The Trump administration had indicated long before the decision that it would explore other ways to impose tariffs if necessary. But that remains to be seen.
For now, the US Supreme Court has shown that no matter how powerful you are, the Constitution and the law are bigger than you. Constitutional courts around the world have been given the message to have the courage to speak the truth to power. French President Macron has said that “the court’s decision shows that the balance of power is favourable in democratic countries.” However, at this time, countries, including India, that had entered into deals with the US under pressure are assessing whether the Supreme Court’s decision provides them with an opportunity for new negotiations. In doing so, everyone will keep Trump’s temperament and his tendency to seek revenge in mind.
Regarding India, Trump announced at his first press conference that the deal with India would remain unchanged, with no changes. Once again praising Prime Minister Modi, he said, “The situation was the opposite before, but we’ve reversed it. Now we’re not imposing tariffs on them, while they’re imposing tariffs on us.” In other words, the US President is warning that there’s no scope for renegotiation. The bigger question is why was the deal with the US signed when it was known that the Supreme Court was about to deliver its decision? During the hearing, there were indications that the court might impose a tariff ban.
Many of our own former diplomats were also cautioning us to wait for the decision. So why the rush?
If we had waited two or three weeks, the looming threat of a 50% tariff would have been lifted, and we would have been on equal footing. The concessions we’ve been given to block Russian oil or partially open up the agricultural sector wouldn’t have been necessary. It’s also unclear why we’re paying them tariffs (now reduced to 15%) while they’re offering us zero tariffs, something Trump proudly claims. What will become of the concessions the US has already extracted from us? Most worryingly, a third party, Russia, has been dragged into a bilateral agreement. We’ve been forced to stop importing Russian oil. Trump has already stated that he will monitor our imports.
The most controversial issue in this agreement is Russian oil. There are already indications that we’ve reduced our imports of cheap Russian oil, which China is taking advantage of. We had to do this to reduce the 50% tariff. US Ambassador Sergio Gor has clearly stated that “India has made commitments to Russian oil in the deal with the US, after which India has changed its energy sources.” Russia, on the other hand, is also closely monitoring this deal. Russian Deputy Foreign Minister Sergei Ryabkov said, “It is hoped that the India-US deal will not harm relations with Russia.” This statement conceals Russia’s concern and also warns that relations with Russia could deteriorate.
New York Times commented that the deal with the US has become “a major headache for Modi.” The newspaper also added, “The price India may have to pay in trade and foreign policy is constantly increasing.” Our people are aware of this, as evidenced by the reactions of two ministers.
The blockade of Russian oil has been widely criticised within the country. We can’t reinstate it under Trump’s pressure, but it could have serious consequences. There are other controversial issues. We’re paying them tariffs, but they won’t pay us tariffs. How is this justified? It’s reported that we’ve promised to buy $500 billion worth of goods from the US over the next five years.
Later, it was described as an “intention.” Currently, we import $41.5 billion from there. How will such an increase be possible? Furthermore, farmers’ organisations are uneasy about the partial opening of the agricultural sector to the US. They fear that infiltration is beginning in this sector. Now, the Indian government has put the matter on hold after the US Supreme Court’s decision. The delegation that was supposed to go there is not going.
