In a landmark decision, the US Supreme Court has struck down broad presidential powers to impose reciprocal tariffs, significantly reducing uncertainty for Indian exporters facing potential 18% duties. The 6-3 ruling came against expansive use of emergency powers under a 1977 law, declaring such unilateral actions require explicit congressional approval.
Experts hail this as a major relief for global trade stability. Manoj Mishra, partner at Grant Thornton India and leader in tax controversy management, noted that any future tariff impositions now hinge on Congress. ‘This opens doors for refunds on previously collected duties lacking legal basis and boosts competitiveness for Indian shipments,’ he said.
Background: The US had tentatively agreed to cut reciprocal tariffs on India to 18% under interim trade arrangements. That deal now stands obsolete post-ruling. Chief Justice John Roberts, authoring the majority opinion, criticized claims of unlimited tariff authority, emphasizing Congress’s role in trade policy.
While strategic sectors might still see targeted duties under Section 232, the verdict pushes for bilateral trade pacts between India and the US. Such agreements could lock in long-term tariff predictability and secure market access.
The decision delivers a setback to former President Donald Trump’s aggressive tariff strategies, reshaping US trade enforcement. For India, it promises smoother exports, fewer surprises, and a level playing field in American markets. Global partners worldwide stand to benefit from this check on executive overreach.