US Tariff On India: 25% to 50%, then 18%… Now how much tariff will India pay after the Supreme Court’s decision?

New Delhi: Former US President Donald Trump used tariffs as a major economic weapon during his tenure. On many international issues, from trade war to Russia-Ukraine war, he adopted the strategy of creating pressure through tariff policy. India also did not remain untouched by this strict American tariff policy.

Now, after the US Supreme Court declared Trump’s reciprocal tariffs illegal, a new debate has started regarding the tariffs imposed on India. The question is, will the 18% tariff on India continue, or will it be reduced to 10% or 13.5%? Let us understand the entire incident step by step.

How did American tariffs on India keep increasing and decreasing?

Donald Trump started implementing tariffs globally in April last year. In the initial phase, 25% reciprocal tariff was imposed on India. Later in August it was increased to 50%. The reasoning behind this was that India was helping Russia during the Ukraine-Russia war by importing oil from Russia. On this basis, 25% additional fee was added as penalty.

After the implementation of 50% tariff, trade tension between India and America increased and negotiations on trade deal were also affected. However, later after an agreement was reached between the two countries, Trump suddenly reduced the tariff from 50% to 18%. He also claimed that India would stop purchasing Russian oil, after which the additional 25% duty was abolished.

Will mathematics change after the Supreme Court’s decision?

The US Supreme Court struck down Trump’s reciprocal tariffs, saying the President cannot impose such tariffs in peacetime using the nearly 50-year-old International Emergency Economic Powers Act (IEEPA). After this decision, the legal basis of 18% tariff imposed on India ended.

If the 18% tariff is considered to be repealed, then India will be charged basically the same duty that it had to pay due to its Most Favored Nation (MFN) status, i.e. around 3.5%.

10% global tariff and new status of 13.5%

After the Supreme Court’s decision, Trump announced the implementation of 10% global tariff using Section 122. This section allows the President to impose a maximum tariff of 15% for 150 days, after which Congressional approval is required.

In such a situation, if an additional 10% global tariff is added to the 3.5% basic duty on India, the total US tariff can reach 13.5%.

Different signals from Trump and White House

Donald Trump said in a statement that the tariff on India will remain at 18% as per the already decided trade deal. However, later the White House clarified that as per the legal position, currently 10% tariff will be applicable on India.

In this way, the situation regarding American tariff on India is not completely clear yet, but after the decision of the Supreme Court, its structure has definitely changed.