India’s tariff cut to 10% as Trump announces global import levy after court setback

India will now face a tariff rate of 10 per cent, down from 18 per cent, after US President Donald Trump announced a new global levy on imports into the United States following a Supreme Court ruling against his earlier tariffs.

In a proclamation titled ‘Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems’, Trump said a “temporary import surcharge of 10 per cent ad valorem” will be imposed on articles imported into the United States for a period of 150 days. The measure will take effect from February 24.

With the new 10 per cent tariff applicable globally, Indian goods exported to the US will no longer be subject to the earlier 18 per cent rate that had been set following a framework for an Interim Agreement on trade between India and the United States.

The move comes after a setback to Trump’s economic agenda in his second term. The US Supreme Court, in a 6-3 verdict written by Chief Justice John Roberts, ruled that tariffs imposed by Trump on countries worldwide were illegal and that the president had exceeded his authority.

Earlier this month, after India and the US announced a framework for an Interim Agreement on trade, Trump issued an Executive Order removing the 25 per cent punitive tariffs imposed on India over its purchases of Russian oil. He noted New Delhi’s commitment to stop directly or indirectly importing energy from Moscow and to purchase American energy products.

Under that trade framework, Washington had agreed to reduce reciprocal tariffs on India from 25 per cent to 18 per cent.

Trump said the new proclamation is aimed at “imposing a temporary import duty to address fundamental international payments problems and continue the Administration’s work to rebalance our trade relationships to benefit American workers, farmers, and manufacturers”.

A White House fact sheet said Trump is invoking authority under Section 122 of the Trade Act of 1974, which “empowers the President to address certain fundamental international payment problems through surcharges and other special import restrictions”.

The proclamation imposes a 10 per cent ad valorem import duty on goods entering the United States for 150 days, effective February 24 at 12:01 am eastern standard time.

According to the fact sheet, several categories of goods will be exempt from the temporary duty due to economic needs or to ensure the measure effectively addresses international payments issues. These include certain critical minerals, metals used in currency and bullion, energy and energy products, natural resources and fertilisers not sufficiently available domestically, and specific agricultural products such as beef, tomatoes and oranges.

Exemptions also cover pharmaceuticals and ingredients, certain electronics, passenger vehicles, light trucks, medium and heavy-duty vehicles, buses, related parts, and certain aerospace products.

Trump criticised the Supreme Court justices who ruled against him, calling them “fools and lapdogs”.

“The Supreme Court’s ruling on tariffs is deeply disappointing, and I’m ashamed of certain members of the Court, absolutely ashamed for not having the courage to do what’s right for our country,” Trump said at a White House news conference on Friday, hours after the verdict.

When asked whether the interim trade framework with India would be affected by the ruling, Trump said “nothing changes”.

“Nothing changes. They’ll be paying tariffs, and we will not be paying tariffs. So deal with India is they pay tariffs. This is a reversal for what it used to be, as you know, India and I think Prime Minister Modi is a great gentleman, a great man, actually, but he was much smarter than the people that he was against in terms of the United States, he was ripping us off. So we made a deal with India. It’s a fair deal now, and we are not paying tariffs to them, and they are paying tariffs. We did a little flip,” Trump said.

“The India deal is on…all the deals are on, we’re just going to do it” in a different way,” he added.

On ties with India, Trump said “I think my relationship with India is fantastic and we’re doing trade with India. India pulled out of Russia. India was getting its oil from Russia. And they pulled way back at my request, because we want to settle that horrible war where 25,000 people are dying every month,” Trump said.

He said his relationship with Prime Minister Narendra Modi “is, I would say, great”.

Trump also repeated his claim that he stopped a war between India and Pakistan using tariffs.

“I also stopped the war between India and Pakistan. As you know, there were 10 planes were shot down. That war was going and probably going nuclear. And just yesterday, the prime minister of Pakistan said President Trump saved 35 million lives by getting them to stop,” Trump said.

“And I did it largely with tariffs. I said, ‘Look, you’re going to fight, that’s fine, but you’re not going to do business with the United States, and you’re going to pay a 200 per cent tariff, each country’. And they called up and they said, ‘we have made peace’,” he said.

In his remarks, Trump said tariffs had been used to end multiple conflicts.

“Tariffs have likewise been used to end five of the eight wars that I settled. I settled eight wars, whether you like it or not, including India, Pakistan, big ones, nuclear, could have been nuclear,” he said.