Moneycontrol Pro Panorama | Tariff defanged

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In this edition of Moneycontrol Pro Panorama: US tariff ruling heightens global trade uncertainty, flash PMIs signal caution for investors, China-Pakistan ties exaggerated yet caution warranted, tariffs don’t disappear they evolve, and more

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

When the United States Supreme Court struck down President Donald Trump’s sweeping reciprocal tariffs imposed under the International Emergency Economic Powers Act, the world held its breath — briefly. Within hours, Trump announced a fresh 15% global tariff under Section 122, replacing the invalidated levies with something the markets quickly recognized for what it was: a softer instrument in a familiar playbook.

The reaction told the whole story. Asia-Pacific indices climbed. South Korea’s Kospi jumped 1.7% to a fresh record high. Hong Kong’s Hang Seng surged over 2%. The MSCI World Index barely flinched. Gold crept up modestly, the dollar slipped a fraction, and US Treasury yields moved by just over a basis point. For all the political drama surrounding the ruling, markets essentially shrugged.

“The market didn’t really react much to the news. It was already widely anticipated,” observed Ed Yardeni of Yardeni Research. “The market learned last year that the economy is remarkably resilient in the face of what I call Trump tariff turmoil.”

That resilience, hardened through a year of whiplash announcements and sudden reversals, reflects something deeper: investors have largely stopped treating Trump’s tariff declarations as durable policy.

For India, the SCOTUS ruling carries particular significance. Among the major economies affected by the original tariff architecture, India finds itself in a notably comfortable position. Emkay Global describes the development as “a positive development for India.” The brokerage expects India to secure more favourable terms in its ongoing trade negotiations with Washington, now that the threat of punishing reciprocal tariffs has been legally defanged.

The ruling, in effect, resets India’s negotiating posture. Without the sword of IEEPA tariffs hanging overhead, New Delhi is no longer compelled to make concessions under duress. It can pursue better market access for its exports from a position of relative strength, recalibrating its trade strategy without the looming shadow of retaliatory escalation. Reports say the India-US trade discussion have been postponed.

The critical distinction in the post-ruling landscape lies not in what tariffs remain, but in what tools Trump retains. Section 232 tariffs — targeting steel, aluminium and autos on national security grounds — remain intact. So do Section 301 duties targeting China. What the court has taken away is the flexibility to wield IEEPA as a broad, country-specific weapon capable of punishing individual trade partners on short notice.

“It was much easier when he could use tariffs as a sledgehammer,” Yardeni noted. “Now it’s become sort of a rubber mallet. It’s certainly not as powerful a tool.”

The new 15% global tariff under Section 122 is, by design, temporary and less surgically precise. Where IEEPA allowed Trump to calibrate pressure country by country, Section 122 applies a blunter, uniform brush. The administration’s pivot toward new Section 232 and Section 301 investigations signals that the next phase of trade policy will be fought sector by sector — semiconductors, pharmaceuticals, critical minerals — rather than through headline-grabbing blanket levies.

None of this means the world is out of the woods. Bloomberg Economics estimates the average effective US tariff rate could still land around 12%, while Morgan Stanley sees the weighted average tariff on Asian economies falling only modestly from 20% to 17%. The structural disruption to global supply chains, corporate investment planning, and bilateral trade agreements negotiated under now-invalidated authority continues to generate noise.

For investors, the counsel from strategists is strikingly uniform: patience. As Hugh Dive of Atlas Funds Management put it, “Sit on hands and do nothing — this is just noise.” The tariff story is not over. It has simply changed shape, and in doing so, perhaps revealed its limits. Our research team has covered the impact of the SCOTUS ruling on markets, while out columnist have argued how the tariff makes global trade more volatile.

It is this limitation that the markets are happy about. However, the tantrums and the capability of Trump to react suddenly will keep markets volatile.

Investing insights from our research team

US Supreme Court ruling on tariffs: What it means for the capital market

Clean Max IPO: Can it power Corporate India’s green transition?

Yes Bank: Is it time to say yes after its long underperformance?

What else are we reading?

Beyond the Headlines: Why the US Supreme Court’s tariff ruling makes global trade more volatile

Data Story: The message from the Flash PMIs for investors

Chart of the Day | India’s luxury homes: Bigger, costlier, and selling fast

How Torrent Power is reshaping its power generation capacity mix

The multiple ramifications of a US attack on Iran

Donald Trump’s new flat-rate tariff is a boost for India, China and Brazil (republished from the FT)

Military overlap between Pakistan and China is overstated but India needs to be wary