Introduction

Trump Tariffs struck down by the Supreme Court of the USA has worldwide implications. I am discussing the legal impact of Trump tariffs struck down on the India-US trade deal in this piece. The simple truth of India-US trade deal is out now. India has, in fact, been lucky to have delayed the deal for so long that it can easily walk out of it without any qualms, but, the question is whether Modi will do that. I suspect he won’t, and herein below I show why that would expose the simple truth of India-US trade deal.

Tariffs on India

India is a member of WTO and therefore enjoys most-favoured nation (MFN) status with the USA under the WTO. All members of WTO are MFN nations by default. There can’t be any discrimination between MFN nations in the matter of import tariffs. However, there are three exceptions: national security, trade remedies (with respect to unfair trade practices) and free trade agreements.

Trump used national security to impose discriminatory tariffs across the world reducing WTO to a naught. He declared national emergency vide executive order (EO) 14257 dated April 2, 2025, reflected in large and persisitent annual US goods trade deficit rising to $1.2 trillion in 2024. He blamed WTO’s MFN tariffs to be responsible for global trade imbalances for lacking reciprocity. Therefore, he announced reciprocal tarrifs vide EO 14257 on all nations of the world with 26% additional tax over and above the WTO’s MFN tariffs for India, which was reduced to 25% vide EO 14326 dated July 31, 2025.

However, another additional tariff of 25% was also imposed on India vide EO 14329 dated August 6, 2025 read with EO 14066 dated March 8, 2022. EO 14066 was specifically directed at Russia in consequence of Ukraine war and was passed by Biden. However, that EO didn’t impose any tariff on anybody. In EO 14329, Trump noted that the national emergency declared in EO 14066 continues and additional tariff of 25% on India was necessary to deal with the said national emergency.

However, the tariff imposed vide EO 14329 was reversed vide EO 14384 dated February 6, 2026, on Trump receiving recommendation and information from his senior officials that India has taken steps to address national emergency declared vide EO 14066, more specifically by committing to stop direct and indirect oil imports from Russia, representing to purchase US energy products, and by committing to a framework to expand defense corporation with the US over 10 years. So, it’s not just cessation of imports from Russia. It’s also cessation of defense co-operation with Russia in favor of the US.

So, in nutshell, till February 19, 2026, India had total import tariffs of WTO’s MFN tariffs plus reciprocal tariffs of 25%. On February 20, 2026,, the situation obviously changed, which I am discussing below.

The Trump Tariffs Judgment

The Supreme Court of the USA has struck down all tariffs imposed by Trump under the International Emergency Economic Powers Act (IEEPA) vide judgment dated February 20, 2026, in Learning Resources vs. Trump. Trump would declare national emergency and then impose discriminatory tariffs under IEEPA relying upon presidential authorities vide section 1702(a)(1)(B), as quoted below:

§ 1702. Presidential authorities
(a) In general
(1) At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—

(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or
transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States; and.1

Trump government reasoned that regulation of importation and exportation of any property with foreign interest extends to imposing import tariffs. The supreme court rejected this argument inter alia on strict interpretation of “regulation” to decline delegation of power to the executive, which was never intended to be so delegated by the Congress. This brought an end to all discriminatory tariffs imposed by Trump last year in the name of national security.

However, things don’t end here. Now Trump has imposed additional 10% tariff across the board effective February 24, 2026, under section 122 of the Trade Act of 1974. This is also over and above WTO’s MFN tariff, but this tariff can’t be called discriminatory because it applies to all nations similarily though it’s a different matter that nations have already signed trade deals with the US, some of which have also become effective. In such cases, they would be discriminated for signing deals with the US. Ridiculous, of course.

India’s Options and Modi’s Compromise

India has till now not signed any agreement in reference India-US trade deal. There is only a US-India joint statement with respect to framework for an interim agreement. The US-India joint statement lists the expected terms of the interim agreement once it will be finalized. Interim agreement will then lead to US-India Bilateral Trade Agreement (BTA). There is not even the finalized interim agreement till now, leave aside the BTA.

So, there is nothing stopping India from walking out of this framework for finalizing the interim agreement followed by the India-US BTA. In fact, if India continues to honor this framework, it will end up with higher additional import tax of 28% (18+10) under the India-US trade deal instead of 10% imposed under section 122 of the Trade Act of 1974, and thus it will volunteer for the ridiculous discrimination.

But the question is will India walk out of it. I suspect it will not under Modi. The EO 14384 dated February 6, 2026, is the simple truth of India-US trade deal. Modi has indeed compromised Indian national security by bartering it for trade benefits for a few exporters. The opposition in India has been campaigning that Modi is compromised, but they are not telling how exactly he is compromised. The fact Modi will not let India walk out of the India-US trade deal vide the framework joint statement, will, however, reveal the simple truth of India-US trade deal to at least some discerning individuals.

Post Scriptum

• Trump has increased tariff imposed under section 122 of the Trade Act of 1974 to 15%. The above-stated stands modified to reflect the change.
• The India-US BTA will not be legal in reference to WTO as it is not FTA. I don’t know how and why India entered into a framework to finalize an interim agreement for an illegal India-US BTA vide India-US trade deal. In case of MOUs (like in case of Japan), Trump has been passing EOs to modify taxes. These EOs to the best of my understanding are also under IEEPA only and stand voided ab-initio. However, in case of BTAs, the US Congress needs to ratify them. Whether the US Congress will ratify them (presumably under National Emergencies Act vide EO 14257) or not, is a different matter. But India doesn’t have any such ratification necessity and any such national emergency declaration. So, on what premises, India is deeming the said BTA to be a legal document when India is a member of WTO? Is it that a reference to EO 14384 will be made in the recitals of India-US BTA to show that the BTA concerns the national security of India through the national security of the USA?

Comment Dated February 23, 2026

Trump has used different mechanisms for different countries for trade negotiations. With some (Japan), it is MOUs; with some (EU), it is joint statements; with some (Mexico & Canada), it is existing trade agreements; with some (China), it is oral agreement; with some (India and South East Asia), it is written agreement.

However, the common thread (including in written agreements with Malaysia, Indonesia & Cambodia) is Trump’s use of his executive authority under IEEPA. In case of frameworks for finalizing written agreements (India, Vietnam, & Thailand), since there is no legal obligation till now, the parties can easily walk out of the frameworks.

In other cases, the use of executive authority has been rendered void by the Supreme Court of the USA. So, in nutshell, the only additional import tariff existing now is 15% tariff imposed under the Trade Act of 1974. The above-stated stands modified accordingly.

Comment Dated February 24, 2026

The US Custom and Border Protection (CBP) notice, CSMS # 67844987, mentions 10% duty under section 122 of Trade Act of 1974. The White House also seems to have clarified that the existing tariff is 10% only. In light of this, the above-stated stands modified accordingly.

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