SBI Research urges India to adopt a “counter-intuitive” negotiation tactic amid US Supreme Court striking down Trump’s IEEPA tariffs, leveraging the interim phase before Congress decides on extensions.
Court Ruling Disrupts Tariff Path
The landmark verdict invalidated IEEPA use for peacetime tariffs—first-ever presidential deployment—shifting power to Congress. Executive pivoted to Section 122 of 1974 Trade Act for 10% global import surcharge starting Feb 24, 2026, for 150 days (up to 15% max).
Section 122 Mechanics
First invocation of Section 122 addresses balance-of-payments via temporary surcharges/quotas. Exempts USMCA-compliant Canada/Mexico goods, existing Section 232 security tariffs; sets stage for Section 301/232 probes.
India’s Negotiation Edge
“Counter-intuitive” approach positions India strategically in uncertainty, as tariffs support trillions in deals (China, UK, Japan). Rupee dynamics, buffers blunt blows; focus on exemptions for pharma/electronics strengthens resilience.
Optimistic Outlook Ahead
Ruling lifts uncertainty, enabling consistent regimes. India’s proactive stance amid divided Congress favors swift bilateral wins, bolstering exports in evolving global trade.
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