New Delhi: The US Supreme Court struck down most of the tariff orders imposed by President Donald Trump with a 6-3 decision as Chief Justice John Roberts wrote the majority opinion. The court clarified that the president does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977. This decision is considered a major blow to the Trump administration’s trade policy, as it had used emergency powers to impose reciprocal tariffs on trading partners around the world. This impacted several countries, including India, where the 26% (later 25%) reciprocal tariff announced on Liberation Day in April 2025 is now invalid.
Trump used IEEPA
This decision will have a profound impact on global trade. Trump used the IEEPA to impose tariffs to address issues such as trade imbalances and fentanyl. However, tariffs on steel and aluminum, imposed under separate laws, will remain in place. This is a relief for India, as Indian exporters in sectors such as textiles, pharmaceuticals, and engineering goods will now see their additional burden reduced. The 25% penalty tariff on Russian oil was already removed under the US-India trade agreement signed in February 2026. The reciprocal tariff was planned to be reduced to 18%, but the court’s decision has now eliminated the legal basis for the original emergency tariff.
What it means for India?
This does not mean that all tariffs will be reduced to zero. With the reciprocal tariffs being lifted, most Indian goods will now be subject to the US’s existing low baseline tariffs, which are already quite low. However, tariffs under Section 232 will remain in place in sectors such as steel and aluminum, affecting approximately 10% of total trade. Indian companies can now claim refunds for billions of dollars in tariffs paid. This decision could provide new impetus to US-India trade talks, as New Delhi will now have the opportunity to negotiate better terms.
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