India Benefits from Legal Chaos in US: Trump Resets Tariffs to 10% After SC Setback

The White House has said that US trading partners, including India, will now face a 10% tariff, even if they had earlier agreed to higher tariff levels under previous trade deals with Donald Trump’s administration.

This comes after the Supreme Court of the United States struck down Trump’s wide-ranging tariff policy. In a 6–3 decision, the court ruled that his administration had exceeded its legal powers by using the International Emergency Economic Powers Act of 1977 to impose broad import tariffs.

Following the ruling, Trump said he signed a new executive order to impose a 10% global tariff using Section 122 of the Trade Act of 1974.

This provision allows the US government to temporarily impose import duties of up to 15% for 150 days to address trade imbalances. Trump announced the decision in a post on Truth Social, saying the tariff would take effect almost immediately.

“It is my great honor to have just signed, from the Oval Office, a global 10% tariff on all countries, which will be effective almost immediately,” he noted.

This 10% duty shall reportedly remain in place until the government uses another legal authority and expects trade partners to continue following US trade agreements.

Trump’s Reaction on SC Ruling

Trump criticised the ruling, calling it “ludicrous,” and argued that it benefits other countries instead of the United States. He said the decision prevents him from imposing even small tariffs under that law, despite having the authority to restrict trade in other ways.

"To show you how ridiculous the opinion is, the court said that I am not allowed to charge even 1 dollar ... I cannot charge 1 dollar to any country under IEEPA I assume this must be done to protect other countries, certainly not the United States of America. I am allowed to cut off any or all trade or business with any country. In other words, I can destroy the trade. I can destroy the country. I can do anything I want but I can't charge one dollar. How ridiculous is that? Their decision is incorrect," Trump said.

Impact on India

Speaking about India, Trump said the trade agreement between the two countries remains unchanged despite the court’s decision.

He said India would continue to pay tariffs while the US would not. He also described his relationship with Narendra Modi as strong and called overall US-India ties “fantastic,” adding that the new deal is fairer for the United States than previous arrangements.

"I think my relationship with India is fantastic, and we're doing trade with India ... Prime Minister Modi is a great gentleman, a great man, actually, but he was much smarter than the people that he was against in terms of the United States, he was ripping us off. So we made a deal with India. It's a fair deal now, and we are not paying tariffs to them, and they are paying tariffs. We did a little flip," the US President said.

Earlier, the US and India had finalised an interim trade agreement. Under this pact, the US reduced its reciprocal tariff rate on Indian goods to 18%, down from as high as 50%. In return, India agreed to remove tariffs on American products, helping ease trade tensions between the two countries.