India-US Trade Talks and Legal Implications
The India-US trade talks, scheduled to finalize the legal text of a recently agreed trade framework, have been postponed. This follows a US Supreme Court ruling that President Donald Trump exceeded his powers by imposing tariffs under the International Emergency Economic Powers Act (IEEPA).
Significance of the Trade Agreement
- The agreement was significant as it was unconventional and potentially outside traditional WTO norms.
- Market access for American products into India was a key component, pending legal finalization.
Impact of US Supreme Court Ruling
- The ruling casts doubt on the authority of unilateral trade deals made without Congressional approval.
- Foreign trade partners may file lawsuits against IEEPA-backed tariffs.
US Response and Future Actions
- The Trump administration may use Section 122 of the 1974 Trade Act to impose temporary tariffs of up to 15%.
- The US plans further investigations into perceived "unfair trade practices", possibly resulting in additional tariffs.
- New sectors potentially facing tariffs include semiconductors, electronics, drones, minerals, and pharmaceuticals.
Concerns and Reactions
- US Trade Representative Jamieson Greer affirmed the existing trade deals but faced criticism for the lack of Congressional approval.
- Deborah Elms of the Hinrich Foundation expressed concerns about the sustainability of these agreements.
- The Indian steel and aluminum industry is seeking concessions amid these developments.
