US Supreme Court ruling on global tariffs

The US Supreme Court ruling has struck down President Donald Trump’s global tariffs and declared them illegal. The ruling declared that the US president had exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by imposing sweeping reciprocal tariffs without congressional approval. This would invalidate the legal foundation of Trump’s “reciprocal” tariffs, which many countries, including Bangladesh, urgently tried to renegotiate. For Bangladesh, especially the lowering of tariff to 19 percent may have seemed like a big relief, but it has come with a trade deal with the US that has rigid compliance conditions. In reaction to the ruling, Donald Trump, invoking Section 122 of the Trade Act of 1974, has announced an imposition of a flat 10 percent tariff on most countries.

What is most baffling, however, is why the interim government was in such a rush to sign the deal on February 9, just 72 hours before our national election, particularly when the issue was under the US Supreme Court’s scrutiny. Critics have questioned the transparency and democratic legitimacy of an interim government signing such a long-term, binding agreement. The current foreign minister, who was the chief negotiator of the deal as an adviser of the interim administration, must explain why such haste and such constraining clauses were accepted. The nation deserves to know.

Now that the deal has been signed, does the new government have any options to back out or renegotiate? The agreement (Article 6.6) does not typically take effect until 60 days after "applicable legal procedures" are complete. Can the new parliament simply refuse to ratify without consequences? Bangladesh’s commerce ministry has already suggested the US Supreme Court’s verdict may mean the February 9 deal "loses its legal basis.” However, walking away from a deal with the Trump administration would be a risky move with potentially swift consequences for Bangladesh. President Trump is known for viewing trade as a zero-sum game, where any perceived loss for the US could be treated as unacceptable and result in retaliation. Bangladesh's new administration is thus in a delicate spot. On February 18, Trump sent a congratulatory letter to Prime Minister Tarique Rahman. Apart from the good wishes, the latter explicitly urged him to maintain the "tremendous momentum" of the trade deal and take "decisive action" on defence pacts. The uncertainty regarding the deal, therefore, remains.

Bangladesh must urgently reassess the agreement clause by clause. This means identifying provisions that have become redundant by the invalidation of reciprocal tariffs, commitments that are still enforceable, hidden fiscal or procurement burdens, and regulatory obligations that will affect industrial policy. Bangladesh will therefore have to step cautiously and continue to engage with the US constructively. It must express its respect for the US legal process and its commitment to mutually beneficial trade. Most importantly, Bangladesh must renegotiate to firmly protect its national interest.