The United States Supreme Court has struck down the sweeping global tariffs imposed by President Donald Trump on foreign imports, ruling that the President exceeded his authority under the International Emergency Economic Powers Act (IEEPA). In its February 20 verdict, the court clarified that the power to levy taxes and duties rests exclusively with Congress under the US Constitution, delivering a major setback to the administration’s trade policy.
In a 6-3 majority decision, the apex court held that regulating international trade does not amount to imposing tariffs, and that the President had overstepped the limits of the 1977 emergency economic powers law. The ruling invalidates the global tariffs imposed on imports from multiple countries and could compel the US government to refund an estimated $175 billion collected so far, potentially straining federal finances.
The judgment also carries significant implications for India. The Trump administration had initially imposed a 25 percent reciprocal tariff on Indian goods and later added another 25 percent penalty over India’s oil imports from Russia, taking the total tariff burden to 50 percent. These higher duties were in effect between August 27, 2025, and February 2, 2026, before being reduced to 18 percent under a subsequent bilateral trade agreement.
While the court’s ruling raises expectations of large-scale refunds, the repayments would primarily go to US-based importers who paid the tariffs, rather than directly to Indian exporters. Indian firms with US subsidiaries that handled imports may be eligible to seek refunds, though the process is expected to be complex and subject to detailed guidelines from US Customs authorities.
Reacting strongly, Trump described the verdict as “disgraceful” and swiftly moved to invoke Section 122 of another trade law to impose a fresh 10 percent tariff on goods from all countries. He clarified that the recently concluded trade agreement with India, which reduced tariffs to 18 percent, would remain unaffected. While the Supreme Court’s decision offers immediate relief to sectors such as IT, pharmaceuticals and textiles in India, trade experts caution that the administration could explore alternative legal mechanisms to reintroduce duties.