Washington DC: In a swift and defiant response to a major judicial setback, United States President Donald Trump has announced he is raising his proposed global tariff to 15%, up from the 10% rate he had signaled just a day earlier. The escalation comes after the U.S. Supreme Court struck down his administration’s previous sweeping tariff regime in a 6-3 ruling, asserting that the President had exceeded his executive authority by using emergency powers to bypass Congress on trade policy.
President Trump criticized the court’s decision as “extraordinarily anti-American” and “poorly written” in a social media post, immediately signing a new proclamation titled “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems.” This new measure relies on Section 122 of the Trade Act of 1974, which allows for a temporary 150-day surcharge of up to 15% to address serious balance-of-payments deficits. The President insisted these new levies are “legally tested” and will be refined over the coming months.
Legal Challenges and the “Section 122” Gambit
The administration’s shift to Section 122 has already drawn sharp criticism from legal experts. Neal Katyal, the Indian-origin lawyer who led the successful Supreme Court challenge against the previous tariffs, argued that the new move lacks “legal teeth.” Katyal noted that the Department of Justice had previously offered contradictory arguments in court and pointed out that “trade deficits”—the President’s primary concern—are conceptually different from the “balance-of-payments deficits” required to trigger Section 122. Katyal challenged the President to take his economic agenda to Congress, stating that the Constitution requires legislative approval for such sweeping changes to trade.
Specific Implications for India
The revised 15% tariff adds a new layer of volatility to India-U.S. trade relations, which had recently appeared to be stabilizing. Earlier this month, the two nations reached a framework for an Interim Agreement that removed a 25% punitive tariff previously imposed on India for its purchase of Russian oil.
Under that agreement, reciprocal tariffs were set to be lowered to 18%. While Trump’s initially proposed 10% global rate would have actually represented a further reduction for Indian exporters, the jump to 15% significantly narrows that benefit. Indian officials and exporters are now faced with a shifting landscape where bilateral deals are being superseded by broader executive actions, creating significant uncertainty for sectors ranging from textiles to technology.
