Following the U.S. Supreme Court’s decision to nullify the imposition of ‘reciprocal’ tariffs, including those affecting Sri Lanka, President Donald Trump has indicated the possibility of implementing a 10 percent tax under separate legislation. Analysts note that many of these laws necessitate adherence to specific procedures.
The Supreme Court, in a 6-3 judgment, determined that President Trump lacked the authority to enforce the ad hoc tariffs by citing a national emergency under the International Emergency Economic Powers Act (IEEPA). Trump criticized the justices for what he perceived as unpatriotic behavior. However, the justices argued that the tariffs would represent a significant expansion of presidential authority over tariff policy. They also pointed out that the tariffs were enacted without congressional approval, which holds the constitutional power to impose taxes.
In Sri Lanka, there have been similar concerns regarding sudden tax impositions, often announced through so-called ‘midnight’ gazettes. These taxes, including those on basic food items, have been criticized for potentially exacerbating malnutrition among children in low-income families.
The Supreme Court’s decision also nullified the ‘reciprocal’ and ‘fentanyl’ taxes imposed on countries like Canada. However, tariffs on steel, which were imposed under different legislation, remain unaffected.
President Trump has stated his intention to impose a 10 percent tax under alternative legislation, including the Trade Act of 1974. This Act was introduced following the collapse of the Bretton Woods system, partly due to monetary policies. Some of these measures require U.S. trade officials to conduct investigations to ascertain whether domestic businesses are adversely affected. Nonetheless, apart from sectors like steel, where protectionism is prevalent, many U.S. businesses have come to appreciate the benefits of free trade and are integrated into global supply chains.
(Colombo/Feb21/2026)
