Following a Supreme Court decision against his broad tariffs, US President Donald Trump placed a new global fee on goods imported into America, delivering a harsh rejection of his signature economic strategy. As a result, India now faces a reduced tariff rate of 10%, down from 18%. Trump claimed on social media that the new tariff order was "effective almost immediately" after he signed it.
According to a White House factsheet, the new tariff is scheduled to go into effect on February 24 for 150 days, with exceptions still in place for industries under different investigations, such as pharmaceuticals, and for goods coming into the US under the US-Mexico-Canada agreement.

Under Section 122 of the Trade Act of 1974, which gives the President the authority to use surcharges and other unique import restrictions to address some basic issues with international payments, Trump slapped new tariffs.
For a maximum of 150 days, Section 122 permits the US president to impose temporary tariffs of up to 15% in order to remedy what the legislation refers to as "large and serious" US balance-of-payments deficits—circumstances in which imports vastly outpace exports.
What Takes Place With Trade Agreements Already Signed?
The White House announced that, regardless of the higher tariffs they may have previously agreed upon, US trading partners like India that made tariff agreements with the US following Trump's tariff directive will now also be subject to a 10% duty.

Earlier this month, the United States and India announced that they had reached a framework for an interim trade agreement after Trump issued an executive order lowering the reciprocal duties on New Delhi from 25% to 18% and eliminating the 25% punitive tariffs placed on India for its purchases of Russian oil.
Indian goods imported into the US would no longer be subject to the 18 percent tariff rate that had been decided upon after the announcement of a framework for an interim agreement on trade between India and the US, given this new tariff rate of 10%, which will be applicable to nations worldwide.

However, unless Congress decides to prolong them, the tariffs imposed under Section 122 will automatically expire after 150 days. Trade experts pointed out that even while the deadline is clear, a president may let the measures expire and then reinstate them by announcing a new balance-of-payments emergency.
The President's trade policy, which was central to his campaign and agenda, will continue to be implemented, the Trump Administration stated.
The legal foundation for the 18% reciprocal tariff levied against India was essentially eliminated by the US court's decision. Due to the legal reorganization, India's tariffs would have decreased to 3.5%, which New Delhi was already paying as a Most Favoured Nation (MFN) prior to Trump's action.

Trump, however, acted swiftly and issued an order imposing a new 10% duty on imports from all nations, including India.
Following the Supreme Court's decision, Trump stated at the White House that the trade agreement between the US and India remains in place.We're trading with India, and I think our relationship is great," he stated.
Trump responded, "Nothing changes." when asked if the Supreme Court's decision would have an impact on the trade agreement with India.We will be exempt from paying tariffs, while others will. Thus, they pay rates as part of the agreement with India. Trump declared, "This is a reversal of what it used to be."

He went on to say, "The India deal is on...all the deals are on, we're just going to do it" this time.
The Supreme Court's decision
The conservative-majority high court said earlier Friday, 6 to 3, that a 1977 legislation that Trump has used to impose abrupt tariffs on certain nations, disrupting international trade, "does not authorise the President to impose tariffs."
In a frenzied response, Trump—who had selected two of the judges who rejected him—claimed without proof that the court was swayed by foreign interests. The court ruled that Trump could not use the five-decade-old International Emergency Economic Powers Act (IEEPA) to impose tariffs during times of peace.

"Had Congress intended to convey the distinct and extraordinary power to impose tariffs" through the 1977 International Emergency Economic Powers Act, the court decided, "it would have done so expressly, as it consistently has in other tariff statutes."Chief Justice John Roberts stated in his decision that "there is no mention of tariffs or duties in IEEPA."
Trump separately slapped sector-specific levies on steel, aluminum, and other items, and the ruling had no effect on those duties. Further sectoral tariffs may result from ongoing government investigations. Nevertheless, it was Trump's largest Supreme Court loss since he returned to the White House 13 months ago. In general, the court has increased his authority.

Trump's Response
Trump announced to reporters following the decision, "I'm ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what's right for our country."Trump insisted that the decision made him "more powerful," saying, "A president can actually charge more tariffs than I was charging in the past in order to protect our country."
Speaking to the Economic Club of Dallas, Treasury Secretary Scott Bessent stated that the alternate approach "will result in virtually unchanged tariff revenue in 2026."

Companies Applaud
As anticipated, the judgment caused a small increase in share prices on Wall Street. The National Retail Federation stated that the decision "provides much-needed certainty" for businesses, and business associations generally applauded it.
Questions Regarding Refunds
In court arguments, the Trump administration stated that businesses would get reimbursements if the tariffs were found to be illegal. However, the problem was not addressed in the verdict. Trump stated that he anticipated years of legal battle over whether or not to issue refunds. The only Trump candidate to support him, Justice Brett Kavanaugh, said the refund procedure might be a "mess."

According to the Penn Wharton Budget Model at the University of Pennsylvania, the court's ruling on tariffs might result in refunds of up to $175 billion.
The governor of California, Gavin Newsom, who is most likely to run for the Democratic presidential nomination in 2028, claimed that Americans should be compensated for the "illegal cash grab."All illegally stolen money must be returned right away, plus interest. "Cough up!"
The Senate Banking Committee's top Democrat, Elizabeth Warren, issued a warning, stating that there was still "no legal mechanism for consumers and many small businesses to recoup the money they have already paid."
According to Yale University's Budget Lab, Friday's decision will result in an average effective tariff rate for consumers of 9.1%, down from 16.9%.

According to the report, the rate "remains the highest since 1946," excluding 2025.
Britain and the European Union, two of the United States' closest trading partners, said they were researching the ruling.