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Trump’s tariffs struck down, what’s next? SBI suggests adopting a ‘counter-intuitive’ approach – The Times of India
US Supreme Court’s recent striking down of President Donald Trump’s tariff framework could lift the policy outlook and influence the current climate of uncertainty. A recent report by SBI Research has suggested that countries may have to negotiate with a “counter-intuitive” approach in the interim phase, given that the final say on tariff matters rests with a closely divided US Congress.It further cautioned that the interaction between inter-sovereign treaties and the actions of juristic persons on tariff issues could complicate, and possibly disrupt, the effort to establish a consistent tariff regime.
“Unscrapping of the tariff structure by the Court(s) can upend uncertainty going forward while jurisdictions need to put in place counter intuitive negotiation to position themselves strategically in the intermittent period where ultimate power lies with a delicately balanced US Congress,” the report stated.The assessment comes after a landmark judgment by the US Supreme Court, which invalidated the President’s use of the International Emergency Economic Powers Act (IEEPA), 1977, to levy tariffs. SBI Research pointed out that the statute had never previously been deployed by any President for tariff imposition and has limited grounding during peacetime.Meanwhile, after the verdict, the executive branch has turned to Section 122 of the Trade Act of 1974 to introduce a temporary 10% global tariff on all imports into the United States. The report highlighted that this is the first time Section 122 powers have been exercised. The measure will come into force on 24 February 2026 and is set to run for 150 days, ending in July unless Congress approves its continuation.Under provisions of the Trade Act, the President may impose temporary import surcharges of up to 15% or apply quotas to address balance of payments concerns. Such actions, however, cannot extend beyond 150 days unless lawmakers pass legislation to prolong them.The newly imposed 10% tariff includes carve-outs. Goods from Canada and Mexico that meet the requirements of the US-Mexico-Canada Agreement (USMCA) are exempt, as are certain national security tariffs that are already operational.SBI Research expects the administration to use the interim window to complete investigations and potentially impose tariffs through Section 301 and Section 232 mechanisms.The report also observed that the court’s ruling may not fully block Trump from introducing similar tariffs under other statutory authorities.It further warned of implications for existing trade arrangements. Because IEEPA-related tariffs have supported trade agreements worth trillions of dollars, including those involving China, the United Kingdom and Japan, the judgment could create fresh uncertainty around several current deals, the report said.
ChatGPT developer OpenAI has halted plans for a significant UK data centre project, citing high energy costs and regulatory challenges as barriers to investment.
The US technology giant had intended to establish its “Stargate” data centre initiative within a new artificial intelligence growth zone in the north-east of England.
The venture was slated for multiple sites, including Cobalt Park near Newcastle and Blyth.
However, OpenAI said the plans are now on hold, awaiting “the right conditions” to facilitate long-term infrastructure investment across the UK.
A spokesman for OpenAI said: “We see huge potential for the UK’s AI future. London is home to our largest international research hub, and we support the Government’s ambition to be an AI leader.
“AI compute is foundational to that goal – we continue to explore Stargate UK and will move forward when the right conditions such as regulation and the cost of energy enable long-term infrastructure investment.”
The reference to energy costs come at a time when prices are being pushed higher by the US and Israel’s war with Iran.
The International Monetary Fund (IMF) said in March that the UK was one of the nations particularly exposed to soaring wholesale costs because of its reliance on gas-fired power, as opposed to sources such as nuclear and renewable energy.
Data centres are powered by very large amounts of energy so are more likely to be exposed to volatile prices.
OpenAI added: “In the meantime, we are investing in talent and expanding our local presence, while also delivering on the commitments under our MOU (memorandum of understanding) with the Government to adopt frontier AI in UK public services.”
Its Stargate project aims to invest billions of dollars into AI infrastructure in the US, with funding from OpenAI, SoftBank, Oracle and MGX and partnering with tech giants including Nvidia and Microsoft.
Building it into the UK came as part of a landmark tech deal between Britain and the US, announced last September amid President Donald Trump’s second state visit.
The deal also included a 30 billion US dollar (£22.3 billion) pledge from Microsoft, the largest ever made by the company in the UK, to fund the expansion of Britain’s AI infrastructure.
Conservative MP and shadow science minister Ben Spencer said: “When global firms cite high energy costs and regulatory uncertainty as reasons to walk away, it tells you everything about the direction of travel.
“For too long, Labour have prioritised courting big tech headlines while neglecting our domestic start-ups, but also the fundamentals that actually attract investment at home.”
Importers are in line for tariff refunds. But whether everyone who paid the for the tariffs will get money back is a trickier question.
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