Winning Bizness Desk
Mumbai. The US government will stop collecting the emergency tariffs imposed by President Donald Trump from Tuesday, following a Supreme Court order that declared them illegal. Even as the collections end, Trump has warned countries against backing out of trade understandings. He said any nation trying to “play games” with the United States would face tougher action and higher tariffs. The decision comes three days after the Supreme Court ruled that the President had exceeded his authority under the International Emergency Economic Powers Act, 1977.
Why emergency tariffs collection stops
The US Customs and Border Protection said tariffs imposed under the International Emergency Economic Powers Act (IEEPA) will no longer be collected from 12:01 am Tuesday, which is 10:30 am Indian time. The agency added that all related tariff codes will be removed from its cargo systems.
Key points at a glance:
- Tariffs were imposed under IEEPA, a 1977 law.
- The Supreme Court ruled 6-3 that Trump overstepped his powers.
- Collections under this law will now cease.
- It is unclear whether refunds will be issued for the past three days.
The agency has not explained why collections continued for three days after the ruling.
Massive revenue and possible refunds
According to the Penn Wharton Budget Model, the court’s decision could force the US government to return more than 175 billion dollars collected under these tariffs. Reuters reported that the US had been earning over 500 million dollars daily from the IEEPA tariffs alone.
Companies may now seek refunds for the duties already paid. However, there is no official clarity on whether the government will process such claims automatically or require formal applications. The financial implications could be significant, both for the federal budget and for importers.
Trump warns nations over trade games
On his social media platform Truth Social, Trump said several countries had harmed America for years through unfair trade. His remarks came as a new 15 percent global tariff is set to begin from Tuesday, covering India and many other countries.
Some nations have objected to the increase from 10 percent to 15 percent. The UK, Australia and New Zealand had earlier agreed to a 10 percent baseline tariff under separate trade understandings. They now argue they should not be made to pay 15 percent. The Trump administration has not clarified this shift.
Trump also claimed the Supreme Court decision has, in effect, strengthened his hand by confirming his ability to use other laws for tariff action.
Other tariff laws remain in force
The court order applies only to tariffs imposed under IEEPA. Duties under other trade laws remain intact, including:
- Section 232 of the 1962 Trade Expansion Act, used for national security concerns.
- Section 301 of the 1974 Trade Act, used against unfair trade practices.
Under Section 232, Trump earlier imposed tariffs on steel and aluminium, citing national security risks. Under Section 301, several tariffs were placed on Chinese goods over intellectual property and trade violations.
India and global impact of 15 percent tariff
Soon after the Supreme Court ruling on February 20, Trump announced a fresh global tariff under Section 122 of US trade law. Initially pegged at 10 percent, it was later raised to 15 percent. Under this provision, tariffs up to 15 percent can be imposed for 150 days without Congressional approval.
India falls within the 15 percent bracket. Over the past year, US tariffs on Indian goods have shifted sharply:
- Around 26 percent earlier.
- Raised to 50 percent at one stage.
- Reduced to 18 percent.
- Now aligned with the 15 percent global rate.
What happens next depends on whether Congress extends the 150-day window, whether an interim India-US trade deal takes effect, and whether the administration invokes other legal routes. For now, uncertainty remains over the long-term direction of US trade policy.
