India tariffs slashed to 10% from 18% after Trump’s big Supreme Court setback

PM Narendra Modi and US President Donald Trump

The White House has said that US trading partners — including India — that finalised tariff agreements with the Donald Trump administration prior to the Supreme Court's ruling will now be subject to a flat 10 per cent tariff temporarily. This is regardless of any higher rates they may have earlier consented to under those deals.

According to a White House official, this new tariff will remain in place until another authority is invoked, emphasising the expectation that trade partners abide by US trade deals.

When asked if India would be subject to a 10 per cent tariff — and whether it would supersede the earlier duties imposed under the International Emergency Economic Powers Act (IEEPA) — a White House official told news agency ANI, "Yes, 10% until another authority is invoked."

The Supreme Court earlier ruled 6-3 that the Trump administration exceeded its legal authority by using the International Emergency Economic Powers Act (IEEPA) of 1977 to impose broad-based import tariffs. Referring to the decision as 'ludicrous', Trump said that this decision benefits other countries but not the US.

"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," the Republican President said.

Following the setback, Trump announced that he would sign an executive order for a 10% global tariff under Section 122 of the Trade Act of 1974. This authority allows for a temporary import surcharge (up to 15%) for 150 days to address balance-of-payments deficits.

"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," Trump posted on Truth Social.

What changes for India?

Trump said the trade agreement with India remains unchanged despite the Supreme Court ruling that went against his broad tariff measures. "Nothing changes. They'll (India) be paying tariffs, and we will not be paying tariffs. So deal with India is they pay tariffs. This is a reversal for what it used to be ... The India deal is on…all the deals are on, we're just going to do it in a different way," he said.

He emphasised that he shares a 'great' bond with Prime Minister Narendra Modi, while describing his overall relationship with India as 'fantastic'.

"I think my relationship with India is fantastic, and we're doing trade with India ... As you know, India and I think 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.

The United States and India finalised an interim trade pact under which Washington reduced its 'reciprocal tariff' rate to 18 per cent from the previous high of 50 per cent. In return, New Delhi agreed to eliminate tariffs on American goods.