The US Supreme Court invalidated President Donald Trump’s emergency powers to enforce broad “reciprocal” tariffs, affecting around 55% of India’s exports to the US with Most Favoured Nation (MFN) tariffs, replacing the previous 18% duties now reduced to 10%. MFN tariffs represent the standard rates the US imposes on all World Trade Organisation members, averaging between 2.8% to 3.3% for Indian goods across various sectors.
Experts suggest that India should review its trade agreement with the US in light of the Supreme Court’s decision. The 6-3 ruling by the Supreme Court highlighted that the US administration overstepped its authority under the International Emergency Economic Powers Act, which does not permit extensive “reciprocal” tariff actions. Chief Justice John Roberts emphasized that the President’s claim of unilateral power to impose limitless tariffs lacked statutory support under IEEPA.
While the court’s ruling restricts Trump’s use of a specific tariff authority, it does not prevent him from imposing tariffs under alternative statutory provisions with stricter procedural constraints. President Trump vigorously defended his trade policies post the Supreme Court’s decision, alleging foreign influences on the justices, announcing a new 10% global tariff, and hinting at potential harsher trade measures, including embargoes.
India is expected to face a temporary 10% tariff following Trump’s global tariff order, with indications from the administration that additional tariff powers might be invoked soon. Trump mentioned the availability of other statutes like Sections 232 and 301 for potential future actions during a press briefing.
