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The US government will stop collecting the emergency tariffs imposed by President Trump from today. The US Supreme Court had declared these tariffs illegal 3 days ago.
American US Customs and Border Protection (CPB) said in a statement-
The collection of tariffs imposed under the International Emergency Economic Powers Act (IEEPA), a 1977 law, will be stopped from 12:01 am on Tuesday night (10:30 am Indian time). The agency has directed imports that all codes associated with these tariffs will be removed from its cargo systems.
According to economists of Penn Wharton Budget Model, due to this decision from the court, the US government may have to return earnings of more than $ 175 billion (Rs 15.75 lakh crore).
According to Reuters, America was earning more than $500 million (Rs 4,500 crore) every day from the tariffs imposed under IEEPA. Now after their cancellation, companies can demand refund.
Trump said- Supreme Court has given me more rights than before
After the cancellation of the global tariff, President Trump said on Monday that this decision has, on the contrary, increased his power. He wrote on his social media platform Truth Social that the Supreme Court has unknowingly given him more rights than before.
Trump said that he will write in ‘Supreme Court’ small letter for some time because he is not respected by this decision. He called the decision stupid and internationally divisive.
Despite this, Trump says that this decision has made it clear that he can make more use of his power to impose tariffs under other laws. The court has legally strengthened the remaining tariffs and can now enforce them more strictly.
Trump also said that he can take tough measures against countries using methods like licensing. He claimed that the court has approved all the remaining tariffs and the number of such tariffs is very high.
It is not known whether the collected tariff will be refunded or not.
This decision is being implemented more than three days after the Supreme Court’s decision. The agency did not explain why the tariffs continued to be charged during these three days. It has also not been made clear whether the people from whom the money has been taken will get it back or not.
This order will apply only to tariffs imposed under IEEPA law. Whereas the tariffs imposed under ‘Section 232’ in the name of national security and ‘Section 301’ of the unfair trade case will continue and there will be no impact of this decision on them.
CBP said it will continue to provide further information to businesses through official communications.
Know Section 232 and Section 301 of American Law
Section 232 and Section 301 of the US trade law are rules through which the government can impose tariffs on goods coming from other countries.
Section 232- This is part of the 1962 law. If the US government feels that excess goods coming from any country could threaten the country’s national security, then the President can impose tariffs on those goods. Meaning, if the army, defense industry or essential domestic industries are seen to be weakening due to imports, then this rule is used.
During his first term, Trump had imposed tariffs on steel and aluminum under this section. He said that American industry is weakening due to excessive imports and it is an issue of national security.
Section 301- This is part of the 1974 law. If America feels that a country is trading unfairly with it, such as violation of rules, intellectual property (IP) theft or discrimination, then it can impose tariffs on that country’s goods.
Many tariffs imposed against China were imposed under this section 301.
Trump imposed 15% global tariff on the world
On February 20, the US Supreme Court ruled by a 6–3 majority that President Trump had exceeded his powers in using the IEEPA law. The court clearly said that under this law the President is not allowed to impose tariffs on imports on such a large scale.
Within hours of the court’s decision, Trump announced new global tariffs. He said that from Tuesday, the same tariff will be imposed on all goods coming to America. Earlier it was said to be 10%, but later it was suddenly increased to 15%. Some officials were also surprised by this sudden change.
This new tariff has been imposed under Section 122 of the US Trade Act. Under this rule, the government can impose tariff up to 15%, but if it is to continue for more than 150 days, the approval of Congress (Parliament) will have to be taken.
India also under the ambit of 15% tariff
This decision will affect India also. In the last one year, America has changed the tax imposed on Indian goods several times. Earlier it was around 26%, then it was increased to 50%. After that it was reduced to 18% and now after the court decision it has come to the global tariff of 15%.
Now, what will be the real impact on Indian goods depends on a few things. Such as whether the US Parliament extends this arrangement of 150 days or not, when will the temporary trade agreement going on between India and America come into force.
Apart from this, whether the US government adopts any other legal path forward or not. This means that the picture is not completely clear yet and there may be further changes.
Section 122 is part of the 1974 law
Section 122 is part of a US law called the Trade Act of 1974. This law gives the US President the authority to immediately impose tariffs on imports if the country faces a sudden trade deficit or economic crisis.
Under this, the President can impose tariffs temporarily without a lengthy investigation process. Usually this tariff can remain in force for 150 days. During this time the government reviews the situation and takes further decisions.
According to NBC News, imposing a uniform global tariff of 15% on all the trading partner countries of the world would mean that the countries which have imposed higher tariffs will themselves be reduced.
Some products are exempt, such as certain agricultural products (beef, tomatoes, oranges), critical minerals, pharmaceuticals, some electronics, and passenger vehicles. The Trump administration said that this tariff will replace the old one and they will continue to try to make more money.
Nixon had imposed 10% global tariff 55 years ago
In the year 1971, there was a huge imbalance in trade and balance of payments between America and the world. America was continuously importing more and was able to export less, due to which the pressure on the dollar was increasing.
After this, Nixon imposed a global tariff of 10% on countries around the world. After this it was felt that if such economic emergencies arise in future, the President should have legal powers to deal with such things. For this purpose, “Trade Act 1974” was passed in 1974.
According to the New York Times report, Section 122 has never been used before. Therefore, it is also not clear that if it is challenged in the court, how the courts will interpret it.
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