Dhaka-Washington trade deal may lose legal basis as US apex court rejects Trump's tariffs
Meanwhile, Trump says he would impose a 10% global tariff for 150 days to replace some of his emergency duties that were struck down by the US Supreme Court.
Experts have suggested that the authorities in Bangladesh should take time to assess the implications of a US Supreme Court ruling on Friday that declared certain reciprocal tariffs, imposed by the Trump administration, illegal.
In reaction to the US court order, trade experts and officials made the suggestion last night (20 February).
Commerce Secretary Mahbubur Rahman told The Business Standard that with the US Supreme Court declaring the tariffs illegal, the trade agreement signed between Bangladesh and the US in this context would also lose its legal basis.
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"In that case, the agreement we signed would no longer be binding on us," he said, adding that Bangladesh would not be obligated to comply with its terms.
The reciprocal tariffs in question were imposed under the International Emergency Economic Powers Act. However, the US court ruled that the law does not authorise measures that are unlimited in scope, scale, and duration.
Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development and an international trade expert, said the ruling is legally clear but practically complex.
"From a legal standpoint, the Supreme Court's ruling leaves little room for ambiguity. Yet the practical implications remain uncertain, particularly because it is unclear how President Trump will respond," he told TBS.
He noted that the Act is only one of several legal instruments available to the US administration. "This decision does not eliminate the administration's broader authority to impose additional tariffs," he said, explaining that other statutory options remain open.
However, those alternative routes could require congressional involvement or formal investigations by the US Department of Commerce, potentially causing delays and political complications. It also remains unclear whether previously collected tariffs will be refunded to US importers.
Abdur Razzaque said Bangladesh needs to buy time to fully understand the consequences of the ruling. "Signing an agreement does not mean it automatically comes into effect. Moreover, even if reciprocal tariffs are withdrawn, bilateral commitments may carry separate implications," he said.
Commerce ministry officials noted that the agreement has not yet been ratified by either side, meaning it has not entered into force.
Former WTO cell director general Md Hafizur Rahman said the court's decision is positive news for Bangladesh. "If the tariffs are cancelled, Bangladesh will have the opportunity to refrain from ratifying the agreement," he said.
The US Supreme Court struck down yesterday President Donald Trump's sweeping tariffs that he pursued under a law meant for use in national emergencies, rejecting one of his most contentious assertions of his authority in a ruling with major implications for the global economy.
The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court's decision that the Republican president's use of this 1977 law exceeded his authority.
The court ruled that the Trump administration's interpretation that the law at issue - the International Emergency Economic Powers Act, or IEEPA - grants Trump the power he claims to impose tariffs would intrude on the powers of Congress and violate a legal principle called the "major questions" doctrine.
The doctrine, embraced by the conservative justices, requires actions by the government's executive branch of "vast economic and political significance" to be clearly authorised by Congress. The court used the doctrine to stymie some of Democratic former President Joe Biden's key executive actions.
Roberts, citing a prior Supreme Court ruling, wrote that "the president must 'point to clear congressional authorisation' to justify his extraordinary assertion of the power to impose tariffs," adding: "He cannot."
Trump has leveraged tariffs - taxes on imported goods - as a key economic and foreign policy tool. They have been central to a global trade war that Trump initiated after he began his second term as president, one that has alienated trading partners, affected financial markets, and caused global economic uncertainty.
The Supreme Court reached its conclusion in a legal challenge by businesses affected by the tariffs and 12 US states, most of them Democratic-governed, against Trump's unprecedented use of this law to unilaterally impose the import taxes.
The three dissenting justices were conservatives Clarence Thomas, Samuel Alito, and Brett Kavanaugh. Joining Roberts in the majority were conservative Justices Neil Gorsuch and Amy Coney Barrett, both of whom Trump appointed during his first term in office, along with the three liberal justices.
The Supreme Court, which has a 6-3 conservative majority, previously had backed Trump in a series of other decisions issued on an emergency basis since he returned to the presidency in January 2025 after his policies were impeded by lower courts.
Trump's tariffs were forecast to generate over the next decade trillions of dollars in revenue for the United States, which possesses the world's largest economy.
Trump's administration has not provided tariff collection data since 14 December. But Penn-Wharton Budget Model economists estimated yesterday that the amount collected in Trump's tariffs based on IEEPA stood at more than $175 billion. And that amount likely would need to be refunded with a Supreme Court ruling against the IEEPA-based tariffs.
At a press conference following the court ruling, Donald Trump said, "The Supreme Court's ruling on tariffs is deeply disappointing. And I'm ashamed of certain members of the court, absolutely ashamed for not having the courage to do what's right for our country."
He said foreign countries are celebrating the ruling, but it won't last long.
"Foreign countries that have been ripping us off for years are ecstatic. They're so happy, and they're dancing in the streets, but they won't be dancing for long, that I can assure you," he said.
He also said all national security tariffs under Section 301 remain in place, and several investigations will be initiated.
"Today, I will sign an order to impose a 10% global tariff under Section 122, over and above our normal tariffs already being charged," Trump warned.
Trump said, without evidence, the Supreme Court has been "swayed by foreign interests and a political movement that is far smaller than people would ever think."
The US president said of the tariffs that "other alternatives will now be used to replace the ones that the court incorrectly rejected."
"We have alternatives, great alternatives," Trump said. "Could be more money. We'll take in more money and we'll be a lot stronger for it," Trump said of the alternative tools.
Trump took issue with the decision, saying it did not make sense.
"I can destroy the trade, I can destroy the country. I'm even allowed to impose a foreign country-destroying embargo. I can embargo. I can do anything I want, but I can't charge $1 because that's not what it says," he said.
"How ridiculous is that?"
Trump quoted Justice Brett Kavanaugh's dissent, which said the decision might not substantially constrain a president's ability to order tariffs in the future.
"He's right. In fact, I can charge much more than I was charging," Trump said.
10% global tariff
In a fresh development, Trump said he would impose a 10% global tariff for 150 days to replace some of his emergency duties that were struck down by the US Supreme Court.
Trump said that his order would be made under Section 122 of the Trade Act of 1974, and the duties would be over and above the tariffs that are currently in place. The new 10% tariff would go into effect in about three days.
The statute allows the president to impose duties of up to 15% for up to 150 days on any and all countries related to "large and serious" balance of payments issues. It does not require investigations or impose other procedural limits.
The Supreme Court earlier declared illegal his broad global tariffs imposed under the International Emergency Economic Powers Act, ruling that he had overstepped his authority under that law.
Trump said his administration was also initiating several Section 301 unfair trade practices investigations "to protect our country from unfair trading practices of other countries and companies."
Trump's decision to lean on other statutes, including Section 122, while initiating new investigations under Section 301 had been widely anticipated. But the 10% tariffs he announced Friday can only remain in effect for 150 days, and Section 301 investigations generally take months to complete.
But Trump said that the five-month window would allow his administration to complete investigations to enhance tariffs.
Asked if rates would ultimately end up being higher after more Section 232 national security probes and Section 301 probes, Trump said: "Potentially higher. It depends. Whatever we want them to be."
He said some countries "that have treated us really badly for years" could see higher tariffs, whereas for others, "it's going to be very reasonable for them."
US Trade Representative Jamieson Greer said details on new Section 301 investigations would be revealed in the coming days, adding that these are "incredibly legally durable".
Trump used that unfair trade practices statute to impose broad tariffs on Chinese imports during his first term.
