A court jolt for US's tariffs plans
India, May 30 -- A US trade court has ruled that Donald Trump's "liberation day" tariff scheme is illegal. To be sure, the judgment seems to rest on a constitutional technicality rather than the economic merits of tariffs. This is because the court has observed that Trump was wrong in invoking emergency powers in issuing the executive order which announced the tariffs.
Whether or not the tariffs have already become infructuous is something we await clarity on. However, it does seem that unless the court ruling is ignored in some way, the Trump administration will have to seek the US Congress's approval to reinstate the tariffs. In principle, the courts have done the right thing in reinstating the agency of the legislature vis-a-vis the executive, which in this case was acting like an entity without any checks and balances.
What does this mean for the Trump administration and Trump personally? The Republican party has narrow majorities in the House of Representatives (220-212) and the Senate (53-45) unlike Trump's larger than life persona playing out in US politics right now. Given that tariffs are likely to have an adverse effect on diverse constituencies in the US, a section of the GOP actually may oppose or stall them when they are debated in the US Congress. The dynamics at play here will not be different from the larger contradiction between Trump and the Republican party: He has repeatedly challenged the latter on various issues and, so far, managed to prevail. It remains to be seen whether the tariff debate sees a similar outcome or not. To be sure, a more important outcome of the latest court ruling could be a large delay in roll-out of Trump's trade policy on things such as tariffs as they now have to be framed as a bill and be subjected to detailed parliamentary procedures.
What does this entail for countries, India included, that are in the process of negotiating trade deals with the US? The most important takeaway is that the constitutional battle over whether or not President Trump alone can decide all things about US policy is still a work in progress. While a sovereign country is perfectly justified in deciding its policies including things such as tariffs, whether or not they are being made by a populist leader or through complicated political negotiations could make a lot of difference to these policies. Waiting and watching, rather than making haste may be the most prudent strategy in dealing with President Trump at the moment....
To read the full article or to get the complete feed from this publication, please
Contact Us.