As America’s top court strikes down the White House’s unilateral trade levies, India must decide whether to fast-track a contentious deal or leverage the ruling to reclaim economic and digital sovereignty
The latest ruling by the Supreme Court of the United States against President Donald Trump’s imposition of reciprocal tariffs is more than a domestic legal scuffle. It is a defining moment for global trade sovereignty — and a constitutional reality check for the White House. For countries like India, which have spent months navigating the choppy waters of Washington’s economic coercion, the Court’s 6–3 decision represents nothing less than a lifeline.
The immediate reaction from President Trump was defiant. He threatened an alternative global tariff of 10%, but in the same breath declared to New Delhi: “The India deal is on.”
Trump’s universal 10% tariff "unwittingly tilted the level playing field toward China," leaving “India at greater disadvantage,” said a former Indian GATT tariff negotiator.
But is it? And more importantly, does it have to be?
Power to tax belongs to Congress
At the heart of the Court’s decision lies a simple constitutional principle: the power to tax belongs to Congress, not the executive. The majority explicitly rejected the Trump administration’s reliance on the International Emergency Economic Powers Act (IEEPA) to unilaterally impose tariffs on allies and adversaries alike. In a masterclass in constitutional originalism, the Court reminded the executive branch that the Framers — having just fought a revolution over taxation without representation — gave Congress “alone…access to the pockets of the people.”
If New Delhi proceeds to implement a one-sided framework agreement negotiated under an illegal tariff regime, it will set a dangerous precedent. A nation of 1.5 billion people would remain tethered not to the rule of law, but to the dictates of an emboldened Uncle Sam.
Six justices — Chief Justice John Roberts, and Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Amy Coney Barrett, and Ketanji Brown Jackson — ruled that the IEEPA does not grant tariff authority. The inclusion of conservative justices Gorsuch and Barrett, both Trump appointees, underscores that this was not a partisan victory but a constitutional one. They affirmed that the word “regulate” in the statute does not encompass the power to tax.
Also Read: US Supreme Court strikes down Trump's global tariffs
The dissent, written by Justice Brett Kavanaugh, took a narrower view, observing that, “The Court says nothing today about whether, and if so how, the government should go about returning the billions of dollars that it has collected from importers.”
To recall, the case against the reciprocal tariffs was brought by several American business groups and joined by 12 US states. Although the Trump administration could return to Congress — where Republicans dominate both the House and the Senate — it may hesitate for fear of failing to muster sufficient support. Vice-President JD Vance, for his part, chastised the Court, calling the ruling “lawlessness… plain and simple".
Yet, whatever the political backlash in Washington, the legal effect is clear: the reciprocal tariffs — those levies used as a cudgel to force nations to the negotiating table — are null and void. And if the foundation is unlawful, so too are the framework agreements extracted under its shadow.
Highest court shows the way
For months, countries bore the brunt of Trump’s aggressive trade policy, justified on dubious grounds ranging from combating spurious drugs to protecting and rebuilding American industry.
Aside from China, few stood up to the pressure. Now, the highest court in the United States has shown them the way. Governments that were strong-armed into deals have a window of opportunity to pause, delay implementation, or reconsider their commitments entirely.
The question is whether New Delhi will seize that moment — or remain overly deferential to Washington’s demands.
Also Read: No change in trade deal with India; it is on: Trump after SC verdict
The stakes are not abstract. They are visible in the deal recently signed with Indonesia. Just a day before the Supreme Court ruling, President Trump and Indonesian President Prabowo Subianto inked a document that effectively surrenders Jakarta’s economic sovereignty. According to a White House factsheet, Indonesia will eliminate tariffs on over 99 per cent of US products, exempt American companies from local content requirements, and accept US federal safety standards over its own. It has even agreed to support a permanent moratorium on customs duties for electronic transmissions at the World Trade Organisation — a move that directly undermines the digital economy ambitions of developing nations.
India-US trade deal
India’s commerce minister insists that New Delhi has protected its sensitive agricultural lines and safeguarded national interests. But the fine print remains murky. If the Indonesia deal is any indication, “protecting interests” may prove to be a euphemism for prying open markets under duress.
As argued in my earlier column, the 25 percent “reciprocal tariff” on Indian goods has been reduced to 18 percent — not eliminated (the position as on date is that while India will eliminate or reduce its tariffs on all US industrial goods and a wide range of US agricultural and food products, the US will keep all its MFN tariffs intact and will only lower the so called “reciprocal tariffs”, bringing them down from 25 per cent to 18 per cent).
Also Read: Trade boost or strategic retreat? India-US deal beyond the rhetoric
In return, New Delhi has agreed to eliminate or reduce tariffs on a wide range of American industrial and agricultural products, including allowing genetically-modified items like soya oil containing 94 per cent GM elements, and DDG (dried distillers’ grains containing GM ingredients used for making ethanol) that it had long resisted. It has signalled willingness to align with US national security concerns, including a commitment to halt purchases of Russian oil — prompting sharp criticism from the Russian foreign minister in response to President Trump’s order referenced in the White House fact sheet.
New Delhi has also opened the door to likely binding commitments on digital trade rules that would curtail its regulatory autonomy. Indonesia — alongside India and now Bangladesh — had been among the foremost opponents of the WTO moratorium on levying customs duties on electronic transmissions. Yet Jakarta has now agreed to Washington’s demand for a permanent moratorium.
Modi govt at the crossroads
Trump insists the “deal is on". But with the legal basis for the original threat struck down, India must ask: why rush?
The government of Narendra Modi stands at a proverbial crossroads. On one side, the American judiciary has offered a constitutional shield — a chance to demand that any agreement be fair, reciprocal in spirit rather than merely in name, and grounded in mutual benefit rather than executive overreach. On the other side, the Trump administration is threatening to deploy alternative legal tools to achieve similar coercive ends.
Also Read: Struck down but not out: Furious Trump vows new 10 pc tariffs
If New Delhi proceeds to implement a one-sided framework agreement negotiated under an illegal tariff regime, it will set a dangerous precedent. A nation of 1.5 billion people would remain tethered not to the rule of law, but to the dictates of an emboldened Uncle Sam.
The American Supreme Court has handed India the legal high ground. The question now is whether its government has the political will to stand on it.
(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas, or opinions in the articles are of the author and do not necessarily reflect the views of The Federal.)
