TOI correspondent from Washington: US President Donald Trump on Saturday raised to 15 per cent the worldwide tariff (which he had previously set at 10 per cent) in a continued display of anger and petulance after the US Supreme Court repudiated his authority in the matter. After lashing out intemperately at the six supreme court justices who rebuked him, Trump took to his Truth Social platform to announce that he is raising tariff “to the fully allowed, and legally tested, 15% level” under Section 122 of the Trade Act which allows the US President to impose tariffs to address “large and serious United States balance-of-payments deficits.”
“During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs, which will continue our extraordinary successful process of Making America Great Again,” Trump wrote, after calling the SCOTUS’ 6-3 opinion “ridiculous, poorly written, and extraordinarily anti-American decision on Tariffs.” He said his decision to increase the tariff rate was the result of a “thorough, detailed, and complete review” of the SCOTUS ruling. The latest announcement, clearly born out of pique and petulance over the SCOTUS snub, is certain to throw the global trading systems out of kilter, with countries and corporations across the world, including in America, unable to plan their exports or imports. Trade experts said the move is certain to face more legal challenges since the US trade balance is not uniform with all countries.For instance, Washington has a trade SURPLUS of $14 billion with Brazil, but Trump still imposed a politically-motivated 50 per cent tariff on the country to punish the ruling Lula government for prosecuting its opponent Jair Bolsonaro, whom Trump supports. In several other instances, including with India, he spoke transparently of wielding the tariff threat to achieve objectives beyond addressing trade deficit issues, a legitimate US concern.While Section 122 of the Trade Act empowers the US President to impose tariffs of up to 15% for 150 days, Trump indicated that after that period, the levies will be replaced with a longer-lasting tariff authority, likely under Section 301 of the Trade Act which deals with “unfair” foreign trade practices. While 301 would allow for more permanent duties, imposing it calls for detailed investigation and notification, with each country and each product meriting separate scrutiny from the US Trade Representative to determine if there has been “unjustifiable” or “discriminatory” acts that burden US commerce.Most notably, the US used Section 301 against New Delhi in a 2020 investigation into its Digital Services Tax (DST), alleging that India’s 2% tax on foreign e-commerce companies unfairly targeted American tech giants like Google, Amazon, and Meta.Under the “Framework of an Interim Agreement” reached in earlier this month, India agreed to fully phase out these levies to avoid the snap-back of Section 301 tariffs.
