In a landmark ruling that has sent shockwaves through global markets, the United States Supreme Court has declared President Donald Trump’s sweeping reciprocal tariffs—affecting nations including Bangladesh—to be illegal. The court’s decision, delivered on Friday, significantly curtails the executive branch’s use of emergency powers to bypass Congress in trade matters. However, the victory for international exporters was short-lived, as President Trump immediately retaliated by announcing a fresh 10% universal baseline tariff.
The Supreme Court’s Verdict
The 6-3 majority ruling found that the President had exceeded his authority under the International Emergency Economic Powers Act (IEEPA). While this act grants the President broad powers during “national emergencies,” the justices ruled that it does not provide a legal loophole to unilaterally impose permanent tariffs for trade leverage.
President Trump reacted with characteristic fury during a White House press briefing, labelling the decision a “national disgrace” and accusing the judiciary of “protecting foreign interests” over American ones.
Impact on Bangladesh and Global Trade
The reciprocal tariffs, introduced on 2 April last year, were part of Trump’s “America First” strategy. For Bangladesh, the impact was severe. Initially, Bangladeshi exports were slapped with a 37% reciprocal tariff, on top of the existing 15% standard duty. Following months of diplomatic negotiations, these rates had gradually shifted.
| Timeline of Tariff Rates (Bangladesh) | Reciprocal Tariff Rate | Total Duty (incl. 15% Standard) |
| April 2024 (Initial Imposition) | 37% | 52% |
| July 2024 (Post-Negotiation) | 35% | 50% |
| August 2024 (Post-Negotiation) | 20% | 35% |
| Early Feb 2026 (Trade Pact) | 19% | 34% |
| Post-Ruling (Trump’s New Proposal) | 10% (Proposed) | 25% (Estimated Total) |
Seeking Alternative Legal Pathways
Despite the legal setback, the Trump administration remains undeterred. The President indicated that he would look toward the Trade Act of 1974 and the Trade Expansion Act of 1962 to enforce his protectionist agenda. Economists suggest that while the ruling might temporarily drop the average US tariff rate from 16.8% to 9.5%, the reprieve will likely be brief as the White House manoeuvres to implement its new 10% levy.
Gregory Daco, Chief Economist at EY-Parthenon, warned that the global trade environment remains volatile. While existing trade agreements—such as those with India and the recently signed pact with Bangladesh—may remain in force, the cumulative effect of a universal 10% increase could still stifle global export growth.