Donald Trump Tariff Policy: Trump’s tariff policy declared illegal by US court, decision to impose 10% tariff canceled

Business Desk- Donald Trump Tariff Policy: A US Federal Trade Court has declared the 10% global tariff imposed by President Donald Trump illegal. Delivering its verdict with a majority of 2-1 on Thursday, the court said that these tariffs were not valid under the Trade Act of 1974. The administration does not have the authority to impose import duty on such a large scale without the approval of Congress.

According to a Reuters report, the Court of International Trade said in its decision that these tariffs imposed earlier this year are invalid under the law. Trump had announced the implementation of these global tariffs through an executive order in February.

Court rejects Trump administration’s argument

Citing Section 122 of the Trade Act of 1974, the administration had argued that America was facing a trade deficit of $1.2 trillion, which is 4% of its GDP. However, the judges rejected this argument and said that such a trade deficit does not meet the mandatory statutory requirements.

Action taken after the previous decision of the court

This case is also special because the US Supreme Court had earlier canceled some tariff decisions taken by the Trump administration. It was ruled that the emergency economic powers of the President are not unlimited. Small businessmen had argued in the court that the new order imposing 10% tariff was brought specifically to avoid the previous decision of the Supreme Court.

The court accepted that the government had violated the powers given by Congress. However, a judge on a three-member panel disagreed and argued that the President should have such power in trade-related matters.

Basic Fun! CEO Jay Foreman said this is a major victory for American companies that rely on global manufacturing to make affordable and safe products.

He further said that due to illegal tariffs, it was becoming difficult for companies to survive and grow in the market. Now this decision will give clarity to the companies handling the supply chain.

What does this court decision mean for India?

Trump has always been vocal about trade agreements and tariffs with India. If the global tariff policy in the US weakens, it could prove to be a positive sign for Indian exporters. This will ensure continued ease of access for Indian goods in the American market. The fear of unwanted increase in costs will also reduce.