New Delhi/Washington. After a major decision of the Supreme Court, US President Donald Trump has toughened his stance instead of accepting defeat. Yesterday the Supreme Court had declared the Emergency Tariff imposed by Trump as illegal. The court said that the President has misused his powers. This decision brought great relief to those companies which were paying taxes worth billions of dollars. But Trump immediately hit back and decided to increase the new global tariff from 10% to 15%.
Trump has made it clear that he will not back down from his trade policy. He said that he will use other legal powers like ‘Section 122’. This stubborn attitude of the President is indicating that the tension between America and its trading partners will increase further in the coming days. After this decision, the biggest question has now arisen regarding refund. Companies are demanding their billions of dollars back, but the Trump administration is preparing for a long legal battle.
1. What is Section 122 and why is Trump weaponizing it?
After the setback of the Supreme Court, Trump has now taken recourse to Section 122 of the ‘Trade Act 1974’. This law empowers the President to impose a temporary tariff of up to 15% to prevent serious trade deficit. However, it has a major limitation that it can remain effective only for 150 days. After this the President will have to take approval from the Parliament i.e. Congress.
Trump believes that this will give him back the power that the court has taken away from him. He also targeted the judges in the press conference and called it a bad decision for the country. Experts say that Trump is using this law because it does not require a long process of investigation. He wants to maintain his ‘America First’ policy by implementing it immediately.
2. Why did the Governor of Illinois give Trump a bill of $ 8.7 billion?
Now politics has also become heated in this whole controversy. Illinois Governor JB Pritzker has sent a formal invoice or bill to Trump. In this he has demanded a refund of 8.68 billion dollars from Trump. The governor argues that due to Trump’s illegal tariffs, every family in his state has suffered a loss of about $1700. He wrote on social media calling it ‘past due’ i.e. outstanding amount.
However, legally the matter is not so straightforward. The tariffs are paid by the companies, not the general public. Companies pass this burden on customers, which increases inflation. In such a situation, even if a refund is given, it will be given to the companies and not directly to the common people. Economists believe that companies like Walmart or Costco will not return old money to customers.
3. Can the refund battle drag on for the next 5 years?
The statement given by Trump on the issue of refund has given sleepless nights to the business world. Trump said, ‘I think this will be litigated for the next two years or maybe five years’. This means that companies that paid billions of dollars in taxes last year will have to go to court to get their money back. The Trump administration had earlier promised that the money would be returned if the court’s decision went against it.
Now the administration seems to be going back on its own promise. Thousands of companies have already filed a case against the government. Now these cases will be heard in the ‘Court of International Trade’. This situation is worst for small traders, as they do not have the funds to fight a long legal battle.
4. What will be the impact of this decision on India and global market?
This news is mixed for India. On one hand, due to the decision of the Supreme Court, some old tariffs imposed on India have become illegal. But Trump’s new 10-15% global tariff has again created uncertainty. India’s Commerce Ministry is keeping a close eye on this entire incident. The ministry has said that it is analyzing the court’s decision and Trump’s statements.
5. Will the global market be ruined?
Trump has hinted that amid increasing tension with Iran, he may also take military action to put pressure on oil and other things. If this happens, the global supply chain will completely collapse. The coming 150 days are going to be very challenging for Indian exporters, because Trump’s new policy can be implemented at any time.
