Penalty Tariff Goes
With the US Supreme court overturning tariffs imposed using authority under International Emergency Economic Powers Act (IEEPA) of 1977 the penalty tariffs imposed on all countries using IEEPA stand cancelled immediately. Which means the 18% reduced penalty tariff for India also stands cancelled.
New Temporary Tariff comes
Immediately after the Supreme court order Trump introduced a 10% tariff on all countries under Section 122 of the Trade Act 1974, which lets the president levy temporary import surcharges (max for 150 days), which means this additional 10% tariff has a short shelf life of maximum 5 months, by which time Trump has to decide on how they will charge additional tariffs to some countries
What it means for India
With immediate effect India's product will have 10% tariff, will it be an advantage to India - Answer is NO. All countries across the world will have additional 10% tariff meaning there is no advantage for India at this moment. So why US India trade agreement? The US India trade agreement will help India to limit additional tariffs to maximum 18% when Trump administration moves with new laws to increase tariffs for all countries. For example some countries will have 25% tariff whereas India will be restricted to 18% or lower.
In short advantage of tariff is removed at this moment for India, may come back later depending on what tariffs are imposed on other countries
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