US Supreme Court Strikes Down Trump Tariffs, Upending Global Deals
The ruling should prompt India to re-examine its trade deal with the United States
In a major setback to US President Donald Trump, the country's Supreme Court has ruled that Trump exceeded his authority by imposing tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law intended for national emergencies.
Chief Justice John Roberts held that IEEPA does not authorise unilateral tariff action and that the administration cited no statute permitting such use.
The ruling invalidates country-specific “reciprocal tariffs” and fentanyl-linked duties imposed on imports from major trading partners.
The decision effectively renders recent trade deals initiated or concluded by the United States with the UK, Japan, the EU, Malaysia, Indonesia, Vietnam and India one-sided and useless. Partner countries may now find reasons to dump these deals.
Trump could attempt to reimpose similar tariffs under Section 301 or Section 232, but those statutes require new investigations and public justification, delaying action and inviting further legal challenges. Also, such measures cannot serve as a universal enforcement tool.
This ruling against Trump would reassert Congress’s primacy in trade policy, sharply curbing presidential latitude to weaponize tariffs and reshaping how future administrations wield emergency economic powers.
Options for India
Removal of reciprocal tariffs will free about 55% of India’s exports to the US from the 18% duty, leaving them subject only to standard MFN tariffs.
On the remaining exports, (i) Section 232 tariffs will continue — 50% on steel and aluminium and 25% on certain auto components — while (ii) products accounting for roughly 40% of export value, including smartphones, petroleum products and medicines, will remain exempt from U.S. tariffs.
The ruling should prompt India to re-examine its trade deal with the United States.
The dispute traces back to April 2, 2025, when President Trump declared America’s chronic trade deficit a “national emergency” and imposed 10% tariffs on nearly all imports, later raised to as high as 50% on selected countries. The US administration argued that decades of trade deficits had weakened their industrial base and posed an economic threat. Critics, however, called the justification unprecedented, noting that the country has run trade deficits since 1975 without such action.
The IEEPA was originally crafted to let presidents restrict financial or property transactions with hostile foreign powers—not to impose general tariffs. Still, the administration relied on it to impose tariffs and collect an estimated $100 billion in new customs revenue.
Legal roadblocks
Three lower courts have already ruled against the Trump administration:
The case was first heard in the U.S. District Court for the Northern District of Illinois, which on April 26, 2025, rejected the government’s argument that IEEPA allowed broad tariff powers and referred the matter to the trade courts.
The US Court of International Trade (CIT), in a June 14, 2025, decision, held that IEEPA does not authorize the president to levy general tariffs and that Trump’s use of emergency powers for routine trade matters violated the Constitution’s separation of powers.
The US Court of Appeals for the Federal Circuit upheld that ruling on August 2, 2025, finding that Congress had never delegated such sweeping authority to the executive branch.
The Supreme Court on August 23, 2025, agreed to take up the administration’s appeal, amid warnings from both sides about the economic stakes. The justices will consider two core issues: jurisdiction and presidential power.
