Trump’s Tariff Playbook Faces US Court Test: What's At Stake For India?

A court decision in Washington is set to carry global implications, particularly for countries such as India that are deeply tied to international trade. The US Supreme Court is preparing to issue a rapid ruling on the use of emergency powers by President Donald Trump to levy tariffs, a move that could either limit his confrontational trade tactics or cement tariffs as a central instrument of US policy.

From India’s perspective, the judgment carries tangible consequences. The decision could decide the fate of high tariffs on Indian exports, shape Washington’s stance on India’s purchases of Russian oil, and determine whether talks on an India–US trade agreement can be brought back to life.

America’s top court will decide whether Trump was authorised to levy wide-ranging tariffs by invoking the International Emergency Economic Powers Act (IEEPA). While the statute permits economic measures during a declared national emergency, it stops short of clearly authorising the use of tariffs.

Trump has already suffered setbacks in the lower judiciary. The US Court of International Trade concluded that the IEEPA does not hand the president open-ended powers to levy tariffs, striking them down on legal grounds rather than policy judgment. That view was later affirmed by the US Court of Appeals for the Federal Circuit.

Judges at the Supreme Court are grappling with a pair of pivotal questions: does the IEEPA authorise the president to impose sweeping tariffs, and whether an adverse ruling would force the US to return billions of dollars in duties paid by importers.

India has been one of the hardest hit by Trump’s hardline trade measures. Tariffs on Indian goods were lifted to 50% in August last year, the highest imposed on any large economy, with a quarter of the increase directly tied to New Delhi’s continued buying of Russian oil.

An endorsement from the Supreme Court would significantly expand the presidential room for manoeuvre on trade. Upholding Trump’s actions would allow tariffs to be imposed or escalated with minimal oversight, sustaining pressure on India amid US demands to curb imports of Russian energy.

Beyond tariffs, the court’s decision may influence whether the India–US trade agreement can be revived. After six rounds of inconclusive negotiations, duties remain the central obstacle. 

Even an adverse verdict would be unlikely to close the chapter on tariffs. Officials have already indicated they are prepared to pursue other legal options, with US Treasury Secretary Scott Bessent noting that at least three provisions of the 1962 Trade Act could be invoked to maintain the duties. 

For India, the Supreme Court’s decision carries consequences well beyond Washington’s legal circles, potentially altering the scale, intensity or form of tariff pressure and influencing the direction of bilateral trade talks at a moment when exporters are seeking respite.

The US has been one of India's main export destinations. However, tariffs dented the merchandise trade, as between May and October 2025, shipments fell 28.5%, from $8.83 billion to $6.31 billion. The decline followed a rapid escalation in US duties that began at 10% on April 2, rose to 25% on August 7, and reached 50% by late August, making Indian goods among the most heavily taxed of any US trading partner.

However, the exports rebounded by 22.61% to $6.98 billion in November, as per the official data shared last month. Despite the rebound, traders have expressed uncertainty for the period ahead, as a trade deal with the US remains elusive despite prolonged negotiations.

(With PTI inputs)