How India may respond to US top court order against Trump’s tariffs, and the alternatives for the US President

The adverse US Supreme Court ruling on Friday (February 20), that President Donald Trump overstepped his powers granted under the International Emergency Economic Powers Act (IEEPA) to impose sweeping reciprocal tariffs has multiple implications for the trade deals inked by the US — including the interim trade agreement with India. Losing this case could mean that the reciprocal tariffs would likely be declared invalid, and there will be demands by American companies for refunds of customs duties collected by the US government since the ‘Liberation Day’ last April, when reciprocal tariffs kicked in. An estimate by the firm PwC put the total tariff collections by the end of October at $108 billion, with China accounting for the biggest share at $34 billion. In the case of India, it was estimated to be $487 million till October 2025. Forcing the withdrawal of ‘Liberation Day’ tariffs following the US Supreme Court order would reset global trade dynamics, and unravel several trade arrangements recently negotiated with key partners such as the EU, Japan, South Korea, the UK and India. All the agreements were struck under the shadow of those tariffs and premised on reciprocal concessions. ## India’s reaction, and the trade deal question Government sources said New Delhi would wait and watch the US government action following the US Supreme Court ruling. India has agreed to enter into an interim trade deal with the US, and the two countries have decided to work towards finalising the Interim Agreement with a view to concluding a mutually beneficial Bilateral Trade Agreement (BTA) consistent with the roadmap agreed in the Terms of Reference. However, the deal not officially signed yet. Indian officials have said that any market access related concession from the Indian side would happen only after the deal is officially signed. On whether India had the option of waiting out further for its trade deal, given the looming possibility of IEEPA being struck down, a senior government official said the option to wait it out till the ruling came was not available, given that it was Trump who had made the phone call that ultimately led to the joint statement text being issued by both sides. Also, if Trump would’ve construed that India is waiting it out, the repercussions could have been deleterious, the official said. The view in New Delhi is that the administration in DC would be resorting to other means to slap tariffs on countries, since this has been Trump’s key foreign policy leverage tool. Post Friday’s ruling, US Customs and Border Protection (CBP) may be required to cease collection of duties and unwind the existing tariff structure. At the same time, importers could face the complex question of how to obtain refunds. The IEEPA, passed way back in 1977, has been broadly interpreted as according US presidents some emergency powers. The court order changes that interpretation. The invalidation of IEEPA, as expected, would also reduce volatility in trade relations, as the US, without these IEEPA-based tariffs, could see this and future administrations return to other statutory tools such as Section 232 and Section 301, which have more defined limits. ## Trump’s Plan B With the legal powers under IEEPA in question, the Trump administration had dramatically increased the use of Section 232 tariffs. Tariffs under Section 232 have raised levies on aluminium, cars and car parts, copper, furniture, lumber, steel and timber, and fresh investigations have already been launched into 10 other types of products. Key investigations include the Trump administration’s review of imports of robotics and industrial machinery. The United States is a net importer of these goods, importing $25 billion more than it exported last year, and the US has no major company mass-producing industrial robots and few domestic component suppliers, the Council on Foreign Relations said. While tariffs under Section 232 would be far less sweeping than reciprocal tariffs that Trump managed under IEEPA, the former provides much stronger legal cover, as the US Supreme Court has on multiple occasions refused to entertain challenges due to the “national security” element in the statute. However, Indian officials have said that Section 232 tariffs have not been a priority during negotiations, as the US tariffs under the statute are imposed equally on all countries and do not hurt competitiveness. The US administration could also probably use Section 122, a provision allowing the president to impose tariffs of up to 15 per cent for up to 150 days. Additionally, the United States Trade Representative and the US Department of Commerce could resort to Section 301, which, like Section 232, grants the American president the ability to slap focused tariffs on targeted countries and select industries. ## Earlier lower court rulings against Trump Parties that argued against the tariffs included over a dozen small American businesses, with the number of parties arguing against the tariffs far outnumbering the parties defending the same. There was an indication of the adverse SC ruling, given that three lower courts had already ruled against the Trump administration. The case was first heard in the US District Court for the Northern District of Illinois, which in April 2025 rejected the government’s argument. The US Court of International Trade (CIT) in June also held that IEEPA does not authorise the president to levy general tariffs. The US Court of Appeals for the Federal Circuit in August ruled that Congress had never delegated such sweeping authority to the executive branch. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, specializing in economic policy and financial regulations. With over five years of experience in business journalism, he provides critical coverage of the frameworks that govern India's commercial landscape. Expertise & Focus Areas: Mishra’s reporting concentrates on the intersection of government policy and market operations. His core beats include: Trade & Commerce: Analysis of India's import-export trends, trade agreements, and commercial policies. Banking & Finance: Covering regulatory changes and policy decisions affecting the banking sector. Professional Experience: Prior to joining The Indian Express, Mishra built a robust portfolio working with some of India's leading financial news organizations. His background includes tenures at: Mint CNBC-TV18 This diverse experience across both print and broadcast media has equipped him with a holistic understanding of financial storytelling and news cycles. Find all stories by Ravi Dutta Mishra here ... Read More Anil Sasi is the National Business Editor at The Indian Express, where he steers the newspaper’s coverage of the Indian economy, corporate affairs, and financial policy. As a senior editor, he plays a pivotal role in shaping the narrative around India's business landscape. Professional Experience Sasi brings extensive experience from some of India’s most respected financial dailies. Prior to his leadership role at The Indian Express, he worked with: The Hindu Business Line Business Standard His career trajectory across these premier publications demonstrates a consistent track record of rigorous financial reporting and editorial oversight. Expertise & Focus With a deep understanding of market dynamics and policy interventions, Sasi writes authoritatively on: Macroeconomics: Analysis of fiscal policy, budgets, and economic trends. Corporate Affairs: In-depth coverage of India's major industries and corporate governance. Business Policy: The intersection of government regulation and private enterprise. Education Anil Sasi is an alumnus of the prestigious Delhi University, providing a strong academic foundation to his journalistic work. Find all stories by Anil Sasi here ... Read More