US Court hits down Trump tariff framework, policy landscape may shift says SBI Research
By Anjali Sharma
WASHINGTON – According to a latest report by SBI Research issued on Sunday said that the US court’s decision to invalidate the existing Trump tariff structure the move could reshape the global policy landscape and alter the trajectory of uncertainty.
The report said “Scrapping of the tariff structure by the Court(s) can reduce uncertainty going forward, while jurisdictions will need to adopt counter-intuitive negotiation strategies to position themselves strategically during the interim period, where ultimate authority lies with a delicately balanced US Congress.”
It added that nations may need to adopt unconventional negotiation strategies during this interim period, as the final authority over tariffs rests with the US Congress..
The report noted that the interaction between inter-sovereign treaties and actions by juristic persons on tariff matters could create complexity, if not disruption, in establishing an effective tariff framework.
US Supreme Court issued a landmark ruling invalidating the President and the Administration’s use of tariffs under the International Emergency Economic Powers Act, 1977.
The Act had neverbeen used by a President to impose tariffs and has limited relevance in peacetime.
The executive branch has invoked Section 122 of the Trade Act of 1974 to impose a new 10% global tariff on all imports into the United States for 150 days. This marks the first-ever use of Section 122 authority, the report stated.
The temporary measure will take effect from 24 February 2026 and continue until July, unless Congress ratifies or extends it.
Under the Trade Act, the President can impose temporary import surcharges of up to 15% or quotas to address US balance-of-payments concerns. These measures can remain in force for a maximum of 150 days unless extended through legislation.
The report said that during this period, the Administration is expected to complete investigations and impose tariffs under Sections 301 and 232 of the Trade Act.
The new 10% tariff includes exemptions, noted for goods from Canada and Mexico that comply with the US-Mexico-Canada Agreement as well as certain existing national security-related tariffs, it stated.
According to SBI Research, the Court’s decision may not entirely prevent the President from imposing similar tariffs using alternative statutory authorities.
A second concern related to the ruling’s impact on existing trade agreements. Since IEEPA-based tariffs had facilitated trade deals worth trillions of dollars with countries including China, United Kingdom, and Japan, the judgment could create fresh uncertainty around several trade arrangements, the report stressed.
The report noted that such uncertainty may complicate global trade negotiations in the near term.
