Indian trade officials have postponed their trip to the US aimed at finalizing their interim trade deal following a landmark US Supreme Court ruling that struck down much of President Donald Trump's tariff regime. According to CNBC, the postponement comes as officials seek to evaluate the implications of the court's decision before proceeding with final negotiations. The source told CNBC that the meeting will be rescheduled at a mutually convenient date, with India and the US agreeing that the visit should be scheduled after each side has had time to evaluate the latest developments and their implications. The three-day trip was originally scheduled to begin this week, with Indian and US negotiators aiming to finalize the legal text of the interim framework. Commerce department officials confirmed that chief negotiator Darpan Jain and his team's visit to Washington DC for finalising the legal text of the interim framework has been rescheduled until the latest developments and their implications have been properly assessed.
The postponement follows a 6-3 US Supreme Court ruling that President Donald Trump had violated federal law by unilaterally imposing "reciprocal" tariffs without clear authorisation from Congress. As reported by The Independent, Chief Justice John Roberts wrote that the president had asserted "the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope" and must identify clear congressional authorisation to exercise such authority. The court said the emergency powers statute relied upon by the administration "falls short," with Justices Samuel Alito, Clarence Thomas and Brett Kavanaugh dissenting. This landmark ruling has fundamentally altered the trade negotiation landscape, creating significant uncertainty for both countries and casting doubt over the legal basis for a range of duties introduced during Trump's second administration. The ruling has created what officials describe as "elbow room" to seek better terms, with indications in certain government quarters that the Modi administration may not be averse to exploring improved deal terms.
Hours after the verdict, Trump announced a 10% tariff on imports from all countries, including India, effective February 24 for 150 days. As reported by The Independent, on Friday, he said he would raise that worldwide tariff to 15%. In a proclamation titled "Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems," Trump invoked Section 122 of the Trade Act of 1974 to impose a temporary 10% ad valorem surcharge for 150 days. Certain goods would be exempt due to US economic needs, including critical minerals, energy products, select agricultural items such as beef and oranges, pharmaceuticals, certain electronics and some categories of vehicles and aerospace products. With an additional 15% tariff under Section 122 of the Trade Act of 1974, all countries have now been put at the same level, at least for 150 days. However, Trump has indicated that countries will have to negotiate levies individually, while allowing greater market access for American goods.
Under Trump's latest proclamation, tariffs on Indian goods would drop to 10% from the existing 25% during the 150-day period, before his subsequent announcement to raise the temporary surcharge to 15%. According to CNBC, India is currently facing a 25% reciprocal tariff, which was due to be cut to 18% after the two sides agreed to an interim deal earlier this month. Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian trade negotiator, told CNBC that at this stage, it appears that India, like other countries, will be facing a 15% tariff in addition to the most-favored-nation status rates (usually around 2-3%). Since the Feb. 6 announcement, both sides had been meeting virtually to discuss the path forward. India's Commerce Minister Piyush Goyal said Friday that the interim trade agreement between the two nations would likely be signed in March and implemented in April. However, Srivastava noted that "the 18% tariff negotiations were based on a certain premise of some benefits which is now gone, now both sides have to rethink their strategy, and the U.S. has to deal with more pressing issues."
The Supreme Court's rejection of Trump's tariff authority has created a new layer of complexity for bilateral trade relations, with both nations now seeking legal opinions on the implications of the judgment before proceeding with negotiations. As reported by The Independent, the lack of proper details on the agreement – and the fact it was supposedly arranged over the phone – led to scepticism over how much had really been achieved. India has made no subsequent public commitment to stop Russian oil purchases, and observers now see the outcome as a preliminary framework rather than a binding trade deal. The ruling's global impact extends beyond India, as Malaysia and Indonesia, which had finalised agreements with the US over tariff, have emphasised that nothing has been notified. South Korea has said that judicial disapproval of Trump's tariffs has nullified its 15% reciprocal tariff deal with the US. Significantly, USTR Jamieson Greer has indicated that the US President can also use Section 338 of the Tariff Act of 1930, which allows for up to 50% tariffs on countries that unreasonably discriminate against US trade through tariffs, regulations or other measures. The legal analysis of US actions is underway along with the possible impact on trade and strategic ties, with the threat of further action by Trump remaining as he continues to weaponise tariffs.