⚖️ US Supreme Court Rules Trump Tariffs Illegal: Relief for SL Exports 📈

The US Supreme Court ruled 6-3 on Friday that President Donald Trump’s administration violated federal law by unilaterally imposing sweeping global tariffs. The court held that the International Emergency Economic Powers Act (IEEPA) does not grant the President authority to bypass Congress to levy taxes/tariffs. • Overall Impact: The ruling effectively invalidates "reciprocal" tariffs (ranging from 10% to 50%) applied to nearly all US trading partners in 2025. Over US$ 130 Bn in collected duties are now under scrutiny, though the court has yet to mandate specific refund procedures. • Key Sector Benefits for Sri Lanka: • Apparel & Textiles: Major reprieve for Sri Lanka’s top export earner. Previous unilateral tariffs of 20% had threatened to make garments uncompetitive against regional rivals. • Rubber Products: Significant relief for the sector, which faced effective rates of 20.2%, risking a projected 42% decline in US-bound exports. • Tea & Seafood: Removal of the baseline "emergency" duties restores previous market access levels for these vital food exports. • Strategic Context: The US is Sri Lanka's largest single export destination, accounting for roughly 23% of merchandise exports. This ruling mitigates a projected US$ 634 Mn loss in annual export revenue and protects thousands of jobs in the apparel sector. • Remaining Risks: Sector-specific tariffs under Section 232 (Steel, Aluminum, Autos) remain in effect. President Trump has already signaled plans to use Section 122 for a new 10% global tariff, which allows a 150-day window without prior Congressional approval. _Note: Impact is based on current legal standing; executive countermeasures are expected._