US Supreme Court Strikes Down Trump Tariffs

In a major development for global trade, the US Supreme Court has struck down former President Donald Trump’s reciprocal tariffs, calling them unlawful under existing legislation.

The ruling means that nearly 55% of India’s exports to the United States will no longer face the recently imposed 18% reciprocal tariff. These goods will instead be subject only to standard Most Favoured Nation (MFN) tariff rates.

What the Court Said

The Supreme Court held that President Trump exceeded his authority by imposing tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law designed to address national emergencies.

Chief Justice John Roberts stated that IEEPA does not grant the president unilateral power to impose tariffs. The court found that the administration did not identify any clear statutory basis for the country-specific reciprocal duties.

The judgment also invalidated fentanyl-related duties that had been applied to imports from several major trading partners.

The ruling reinforces Congress’s primary role in shaping US trade policy and limits the executive branch’s ability to use emergency powers to introduce broad tariff measures.

What It Means for India

According to an analysis by the Global Trade Research Initiative (GTRI), removal of the reciprocal tariffs will free around 55% of Indian exports to the US from the 18% duty.

However, not all products are affected equally.

• Section 232 tariffs will continue, including 50% duties on steel and aluminium and 25% on certain auto components.

• Products accounting for roughly 40% of India’s export value to the US — such as smartphones, petroleum products and medicines — were already exempt from the reciprocal tariffs.

Trade experts say the decision could prompt India to reassess aspects of its ongoing trade discussions with Washington. An interim trade arrangement between the two countries had earlier included a reduction of tariffs to 18%, which may now become irrelevant after the court’s ruling.

Market and Policy Impact

Analysts noted that global markets reacted positively to the verdict. US equities recorded gains, and India’s GIFT Nifty index rose sharply, reflecting investor optimism.

Banking and market specialist Ajay Bagga said that while the outcome had largely been anticipated by markets, uncertainty remains over how the US administration may respond. Any effort to refund previously collected customs duties could have fiscal implications for the US government.

Manoj Mishra, Partner and Tax Controversy Management Leader at Grant Thornton Bharat, said the decision reduces tariff uncertainty for Indian exporters and reinforces limits on unilateral tariff actions.

He added that any future attempt to impose similar tariffs would require Congressional approval. This could provide greater legal clarity and stability for exporters.

What Comes Next?

While the court has struck down the reciprocal tariffs, the US government may still explore other trade measures under Section 301 or Section 232. However, these require fresh investigations and formal procedures, which could delay implementation and invite further legal scrutiny.

Trade experts say the focus will now shift to how the US Congress and administration respond, and whether ongoing trade negotiations are reshaped in light of the ruling.

For Indian exporters, the decision offers potential relief and improved competitiveness in the American market. However, sector-specific duties remain in place, and broader trade discussions between the two countries are expected to continue.