Story thus far:
February was an eventful month for India-US commerce relations. The 2 international locations introduced an impending interim commerce settlement, the US Supreme Courtroom overturned President Donald Trump’s tariffs, the Indian negotiating staff indefinitely postponed a go to to Washington, and Commerce Minister Piyush Goyal welcomed US Commerce Secretary Howard Lutnick to New Delhi. All of this begs the query of what is going to occur to commerce offers and U.S. tariffs.
What did the U.S. Supreme Courtroom say?
Mr. Trump used the Worldwide Emergency Financial Powers Act of 1977 to impose many of the tariffs on different international locations, together with India. On February 20, the U.S. Supreme Courtroom struck down the tariffs imposed underneath this legislation. The imposition of tariffs underneath these legal guidelines would require Congressional approval from the U.S. president. For many international locations, this included eliminating the “reciprocal tariffs” that Trump had imposed on international locations beginning in mid-2025. On February 6, Trump lifted a 25% penalty imposed on India for importing Russian crude oil. This decreased India’s complete customs duties from 50% to 25%. In response to a joint assertion issued by the 2 international locations, the remaining 25% of mutual tariffs will likely be decreased to 18% underneath the interim settlement. However earlier than the US may accomplish that, the Supreme Courtroom struck down the tariffs.
What was the Trump administration’s response?
Trump slammed the Supreme Courtroom in a number of social media posts and speeches. As anticipated, he additionally appealed to different legal guidelines that might impose tariffs on different international locations. Presently, a flat 10% tariff will likely be imposed on all imported items for 150 days beginning January twenty fourth, however Trump has stated he’ll elevate this to the utmost permissible restrict of 15%. That hasn’t occurred but. A number of different tariffs imposed by the US over the previous yr or so stay in place. This features a 50% tariff on aluminum and metal imports and country-specific duties on gadgets valued underneath $800. Metal and aluminum account for the majority of India’s exports to the US, and each proceed to impression India as Indian MSMEs leveraged e-commerce platforms to reap the benefits of obligation exemptions on gadgets valued under $800.
America on February 24 imposed a 126% tariff on imports of solar energy modules from India, following a “preliminary” discovering that sponsored exports from India had been hurting American photo voltaic firms.
What concerning the impression on different commerce agreements?
The European Union, which already has a commerce take care of the US, has been very vocal about what it expects from the Supreme Courtroom’s ruling. “The European Fee seeks full clarification on the steps the US intends to take following the latest Supreme Courtroom determination on the Worldwide Emergency Financial Powers Act (IEEPA),” the fee stated in an announcement. “The present state of affairs isn’t conducive to reaching the ‘honest, balanced and mutually helpful’ transatlantic commerce and funding that each side have agreed to and as enshrined within the August 2025 EU-US joint assertion.” Japanese officers have additionally been vocal concerning the deal, saying they weren’t eager to assessment the settlement as a result of the Japan-US deal centered on auto tariffs, which might not be affected by the Supreme Courtroom ruling.
Australia’s Commerce Minister stated that as Australia was defending its aims by permitting duty-free imports of US merchandise, the US ought to respect the free commerce agreements signed between the 2 international locations and permit duty-free imports of Australian merchandise into the US.
How did India react?
Goyal has stated in numerous interviews and press conferences that the interim settlement might be formally signed by mid-March and are available into drive by early April. Nonetheless, these statements had been made earlier than the Supreme Courtroom’s determination was issued. In response to this ruling, the Ministry of Commerce and Trade issued a comparatively inorganic assertion in comparison with statements from different international locations and organizations. “We took observe of the US Supreme Courtroom’s determination on tariffs yesterday,” the assertion stated, including: “President Trump additionally addressed this in his press convention. A number of measures have been introduced by the US administration. We’re finding out the impression of all these developments.”
The Indian staff was scheduled to go to Washington from February 23 to 25 to finalize the define of the interim settlement in order that it might be signed in mid-March. Though the official assertion didn’t point out the settlement, Indian Commerce and Trade Ministry officers stated, “Each side are of the view that the proposed go to of India’s chief negotiator and staff will likely be scheduled solely after each side have had time to evaluate the newest developments and their impression.” In different phrases, his go to to the US has been postponed indefinitely. However within the meantime, Mr. Goyal hosted each Mr. Lutnick and the US Ambassador to India, Sergio Gol, in New Delhi on February 26, a gathering that, in Mr. Goyal’s phrases, was “fruitful.” A brand new date for the official negotiators assembly has not but been introduced.
For now, the deal is extra essential to the US than to India, since India would be capable of decrease tariffs on American items as soon as the deal is signed. On the identical time, the specter of U.S. tariffs that had loomed over points akin to the acquisition of extra Russian oil and U.S. items has been eradicated in the intervening time.
Has the US modified its perspective?
Relating to commerce agreements, the Trump administration has made it clear that “nothing will change.” Trump warned international locations with agreements to honor them, to not “play video games” and danger going through elevated tariffs. “International locations that wish to ‘play the sport’ with ridiculous Supreme Courtroom rulings, particularly these which were ‘ripping off’ the US for years, even a long time, will find yourself with tariffs which are a lot larger and even worse than those they simply just lately agreed to,” he stated in a put up on Reality Social. He continued, “As President, I haven’t got to return to Congress to get tariffs accredited. Tariffs had been already there in lots of varieties way back! And so they had been simply reaffirmed by this ridiculously poor Supreme Courtroom determination!”
Lutnick additionally stated that nothing has modified from the U.S. perspective and that he expects different international locations to maintain their commitments. “I have been telling (U.S. buying and selling companions) for a yr that win or lose, we’ll impose tariffs,” Lutnick stated in a tv interview. “The president’s insurance policies had been going to proceed. They signed these agreements, even with the litigation pending…We wish them to know that these agreements will likely be good agreements. We count on them to help it. We count on our companions to help it as properly.”
issued – March 1, 2026, 2:00 AM IST
