Unravelling of President Trump’s tariff strategy

Washington's trade deals are starting to fall apart in the wake of the US Supreme Court ruling on the so-called reciprocal tariffs

- Ajay Srivastava

The evolving US trade approach, from tariffs to investigations, should concern policymakers and economists about its credibility.

(AP)

On March 15, Malaysia became thefirst country to walk away from its trade deal with the US. The move followed the US Supreme Court’s February 20 ruling that struck down the Trump administration’s “reciprocal tariffs,” removing the legal foundation of the strategy Washington had used to pressure trading partners into making concessions. With the tariffleverage gone, theagreements negotiated under it suddenly lost much oftheir value. The Supreme Courtruling has forced Washington to rethink its tactics. Unableto rely on sweeping countrywide tariffs, the administration is shifting toward narrower, product-specific investigations to retain leverage and discourage partners from abandoning the deals already signed. Yet this approach risks creating new friction, as governments that already made concessions now face fresh probes and the threat of new tariffs.

The evolving US trade approach, from tariffs to investigations, should

concern policymakers and economists about its credibility.

To understand how this situation emerged —and whatit could mean for India and the global trading system —it is necessary to trace the evolution of President Donald Trump'strade strategy from the “Liberation Day” tariffs announced on April 2, 2025, to the legal and political fallout now unfolding.

Phase one of the Trump administration’s trade policy began in April 2025, when Washington imposed high “reci rocal tariffs” on most trading partne! arguing that foreign barriers were responsible for the large US trade deficit. The US offered countries relief if they negotiated concessions on tariffs, investmentrules, procurementaccess or regulatory barriers.