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The United States Supreme Court on 20 February struck down former President Donald Trump’s sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA) of 1977. The court ruled with a 6-3 decision that the Trump administration had overstepped its legal authority when it implemented these security measures, which the administration had initially described as necessary for national defense.
The decision comes ahead of the US mid-term elections, highlighting its political and economic significance.
Donald Trump declared the Supreme Court decision to be a “terrible decision” after he signed an executive order that established a 10% global tariff through Section 122 of the Trade Act of 1974. The temporary measure will last 150 days as it serves to resolve international balance-of-payments problems.
The existing Section 232 national security tariffs and Section 301 unfair trade practice tariffs will remain in effect, which protects all other trade barriers.
Despite the IEEPA ruling, Trump confirmed that there is “no change in the trade deal with India.” He highlighted the ongoing positive relationship with Prime Minister Narendra Modi and India’s reduced oil imports from Russia.
Under the current framework, India will continue to pay tariffs, while the US will not impose reciprocal duties. Trump also reiterated claims that prior tariffs influenced regional stability between India and Pakistan.
India still faces these duties, which will impact its ability to import goods from both the agricultural and industrial sectors. While the tariffs are temporary, they underscore the complexities of India-US trade negotiations and highlight the influence of US domestic policy on international commerce. Indian businesses and government officials should watch the 150-day period as it will provide information about whether Congress will approve extensions.
