Trade deals, court ruling, fresh tariffs. What next from Trump?

Highlights:

• US tariff uncertainty pauses new export commitments
• Buyers renegotiate orders, demanding additional 2% discounts
• Exporters face margin erosion amid pricing pressure
• Policy volatility creates procurement stalemate among US clients
• Flat 15% tariff risks eroding Bangladesh's advantage
• Garment sector caught between uncertainty and buyer pressure

US President Donald Trump's unilateral tariffs put the world on edge a year ago. Countries – both allies and adversaries – rushed to Washington to have the rates lowered and their market shares retained. Trade negotiators from across the globe struggled to meet deadlines set by the Trump administration for agreeing on new trade terms and concluding deals. Some agreements have already been signed; others remain on the negotiation table. Yet Trump's country-specific tariffs have continued to remain in force at the prescribed rates.

Then came a major setback. The Supreme Court of the United States blocked most of Trump's emergency tariffs, ruling that the president had overstepped his authority.

Infuriated but undeterred, Trump quickly turned to another legal tool, announcing a flat 10% tariff worldwide. The rate was soon raised to as high as 15% before being brought back to 10%. Under US law, the latest tariff – already in force – will remain valid for 150 days unless extended by Congress.

These rapid shifts exposed policy volatility, giving major trading partners some leverage as the court ruling weakened Trump's legal footing. The European Union stood firm on the deal it signed with the United States last year. "A deal is a deal," the European Commission said in Brussels, insisting that Washington must respect previously agreed terms. Trump's new rate, it warned, would exceed the earlier ceiling and make European products more expensive in the American market.

The ruling may also complicate efforts to stabilise relations with China. Trump had earlier relaxed his stance on Chinese goods, lowering tariffs to 20% in exchange for measures from Beijing, including increased soybean purchases and a pause on restrictions on critical mineral exports.

The White House confirmed Trump's planned visit to China from 31 March to 2 April last Friday – just before the Supreme Court struck down his sweeping emergency tariffs, including those on Chinese imports.

Amid the uncertainty, the European Parliament put the scheduled ratification of the deal on hold, demanding "full clarity" from Washington on how the court ruling would be implemented and whether transatlantic trade would remain predictable and mutually beneficial. It also stressed the need for fair treatment and legal certainty for European exporters.

Under the deal, the EU is required to purchase US goods worth $750 billion over three years, while most of its exports to the US would face a 15% tariff, down from the 30% earlier threatened.

India, too, is seeking clarity before resuming talks, though the country is willing to conclude the trade deal with the USA, Indian trade minister Piyush Goyal said before his meeting with US Commerce Secretary Howard Lutnick in New Delhi on Thursday.

Both countries earlier agreed on a framework with Washington offering to cut tariffs to 18% from previously-announced 50% which include a 25% punitive tariff for India's purchase of Russian oil.

Earlier, both sides had agreed on a framework under which Washington would cut tariffs to 18% from the previously announced 50%, which included a 25% punitive tariff linked to India's purchase of Russian oil.

Bangladesh's trade deal with the US, signed on 9 February at the tail end of the interim government's tenure, has also come under renewed scrutiny following the court ruling. The deal, though it lowered tariffs on Bangladesh to 19%, requires Bangladesh to purchase US goods – from cotton to aircraft – worth billions over next few years to help the US reduce trade gap with its tiny partner.

The onus is now on the new government that took office after the 12 February election.

In an immediate reaction, Commerce Secretary Mahbubur Rahman said the agreement could lose its legal basis after the US court ruling. However, economist Zahid Hussain said the deal has not lost its legal logic. He advised caution.

"The cost of moving too early is far greater than the cost of waiting," he warned, suggesting Dhaka should review which clauses are unfavourable and how the deal could be made fairer.

The commerce ministry has adopted a wait-and-see approach. After consultations with exporters and analysts, it decided neither to initiate fresh talks nor to proceed with ratification for now.

Trump claimed that higher tariff revenues could significantly replace income taxes for Americans. Yet data suggests otherwise. A recent paper by the New York Federal Reserve found that nearly 90% of the economic burden of tariffs falls on US firms and consumers.

Meanwhile, legal challenges are mounting. Global logistics giant FedEx has filed a lawsuit with the US Court of International Trade, seeking refunds of tariffs imposed under the emergency measures. The case could signal the beginning of broader refund claims potentially worth over $175 billion.

The ruling has political implications as well. Gavin Newsom, governor of California and a potential 2028 Democratic presidential candidate, has called for Americans to receive refunds.

Trade attorneys note that importers and distributors may claim refunds based on customs documentation, though the legal path could be lengthy. A previous Supreme Court decision in 1998 led to $730 million in refunds, but the process took years.

For consumers, however, prospects are dim. As Stephanie Roth of Wolfe Research told CNN, retailers are unlikely to reimburse customers for past tariff-driven price increases.

As of 14 December, the federal government had collected $134 billion in tariff revenue from more than 301,000 importers, according to US Customs and Border Protection – averaging over $500 million per day before the emergency measures were halted following the court ruling.

Trump's latest 10% tariff would be added to existing country-specific duties imposed before the latest round of deals. But the order will expire after 150 days unless Congress approves an extension. Still, Trump insisted that the stance would lead to even a stronger solution than before.

In his State of the Union address on 24 February, Trump criticised the court's decision as "very unfortunate", yet insisted that US trading partners would prefer to stick with existing deals as he retains the authority to negotiate new ones that "could be far worse for them".