Trump Supreme Court Tariff Ruling 2026: IEEPA Struck Down — India Impact

When Donald Trump returned to the White House for his second term, trade policy became one of his most aggressive instruments. He invoked the International Emergency Economic Powers Act (IEEPA) — a 1977 law granting the President broad power to regulate international commerce during a declared national emergency — to impose sweeping import tariffs on goods from countries across the world, framing America’s trade deficit as a national emergency.

No previous president had used IEEPA to impose tariffs at this scale or scope. The move was immediately challenged in courts, with plaintiffs arguing that Congress — not the President — holds the constitutional power to levy taxes and duties on imports under Article I of the US Constitution.

The Supreme Court’s majority held a clear constitutional position: IEEPA does not authorise the President to impose tariffs. The power to levy taxes and duties on imports belongs to Congress under Article I of the US Constitution. A presidential declaration of national economic emergency does not transfer that legislative authority to the executive branch.

The ruling was the most significant judicial rebuke of Trump’s second-term agenda. Crucially, the 6-3 conservative court — shaped by Trump’s own three first-term appointees (Neil Gorsuch, Brett Kavanaugh, Amy Coney Barrett) — ruled against him, with justices crossing partisan lines. Trump had publicly expected his nominees to support his position.

Trump’s response to the ruling was, by any historical measure, extraordinary. At a White House press conference flanked by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, Trump launched an unprecedented attack on the Supreme Court — including justices he personally appointed.

He called the ruling “a disgrace to our nation”, described majority justices as “fools and lapdogs,” accused the court of being “swayed by foreign interests” without evidence, and said the ruling was an “embarrassment to their families” — targeting his own nominees Gorsuch and Barrett by name. Vice President JD Vance called the ruling “lawlessness from the court” — a framing that constitutional scholars called an alarming inversion of the constitutional order.

Within the same press conference, Trump announced he would sign an executive order imposing a 10% global tariff on all imports under an entirely different legal authority — Section 122 of the Trade Act of 1974. This provision grants the President authority to impose a temporary tariff of up to 15% to address a large and serious balance-of-payments deficit.

However, Section 122 comes with a critical constraint: the tariff can last a maximum of 150 days without Congressional approval. After 150 days, Congress must affirmatively extend it, or the tariff expires — setting up a major political battle around July 2026. Treasury Secretary Bessent stated that combined with tariffs under Sections 232 (national security) and 301 (unfair trade practices) — unaffected by the ruling — total tariff revenue in 2026 would be “virtually unchanged.”

At its core, this ruling is about separation of powers — the constitutional architecture dividing authority between Congress, the President, and the judiciary. The court reinforced the non-delegation doctrine: the principle that Congress cannot simply hand over its core legislative powers to the executive. The Constitution gives Congress the power to levy taxes and regulate commerce; Congress may give the President limited authority in specific circumstances, but cannot effectively abdicate its legislative role through a blank-cheque emergency powers law.

The ruling also raises the future of IEEPA itself. Used since 1977 for sanctions and asset freezes, its broader scope is now live for litigation. Expect significant legal and legislative battles on IEEPA’s limits in the coming years. This ruling draws a clear constitutional line that will outlast the Trump administration.

Despite the constitutional turmoil, Trump confirmed explicitly at the same press conference: “The India deal is on.” He cited India’s decision to reduce purchases of Russian oil at his request as evidence of bilateral goodwill. India and the US had reached an interim trade framework in the weeks before the ruling, and India-US trade officials were set to hold three days of talks beginning February 23 to finalise the legal structure for the interim pact.

Commerce Minister Piyush Goyal confirmed the interim pact is expected to take effect in April 2026. Notably, India signed the Pax Silica declaration on the same day as the Supreme Court ruling — a strategic technology partnership signal covering semiconductors, AI, and defence — reinforcing that the India-US relationship is advancing on multiple tracks simultaneously, insulated from Trump’s domestic political battles.

The new 10% Section 122 tariff does apply to all countries including India. However, the 150-day time limit, India’s interim trade framework, and the export basket composition (pharmaceuticals, IT services, gems, engineering goods) all moderate the impact. India’s strategic calculation appears sound: anchor long-term ties in technology and security cooperation, accept some short-term tariff friction, and position India as an indispensable US partner in the Asia-Pacific.