In a whirlwind of US domestic tariff drama, President Donald Trump’s quick response to a Supreme Court defeat has left global trade partners scrambling.
With a new 10% global tariff imposed under Section 122 of the Trade Act of 1974, countries like India, the European Union (EU), and several Eastern nations could end up paying less than what was agreed in recent deals.
Experts warn, however, that this policy flip-flop is undermining the value of US trade agreements and increasing worldwide economic uncertainty.
Supreme Court Rejects Trump’s IEEPA Tariffs
The saga began on February 20, 2026, when the US Supreme Court issued a 6-3 ruling invalidating Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad “reciprocal” tariffs. Chief Justice John Roberts wrote in the majority opinion that IEEPA “does not authorize the President to impose tariffs,” marking a major setback for Trump’s aggressive trade agenda.
Undeterred, Trump responded defiantly. In a White House press briefing, he criticized the court, calling the decision “deeply disappointing” and even targeting his own nominees, Justices Neil Gorsuch and Amy Coney Barrett. “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.
Hours later, on Truth Social, he announced the new 10% global tariff, effective “almost immediately.” Limited to 150 days without congressional approval, the move is intended to replace the invalidated IEEPA duties. A White House official told CNBC that some partners could pay lower rates compared to previous agreements.
Impact on India, EU, and Eastern Countries
For India, which recently negotiated a tariff cut from 50% to 25% (with a further drop to 18% pending), the flat 10% rate could provide immediate savings on exports to the US. Similarly, the EU, which had a 15% rate under its deal, might see a temporary dip to 10%. Eastern countries in ongoing negotiations could also benefit from reduced levies.
But the sudden shift raises questions. “This policy uncertainty is stretching too far, leaving the world in limbo,” said one international trade analyst, reflecting the concerns of global business leaders. Economists estimate the US could owe up to $175 billion in refunds for tariffs collected under IEEPA, further complicating matters.
Dissenting Justice Brett Kavanaugh warned that the refund process would be a “mess,” potentially disrupting Treasury operations and existing agreements with nations like China, Japan, and the UK. China, facing a combined 35% rate under the new setup (down from previous IEEPA layers), highlights the confusion.
Trump maintains that tariffs protect US manufacturing and national security, but critics argue they burden American consumers and businesses. A Federal Reserve Bank of New York study showed that 90% of tariff costs were passed onto US entities in 2025.
Broader Implications for Global Trade
Trump’s “Game Two” approach using alternative laws like Sections 232 and 301, signals more volatility ahead. Treasury Secretary Scott Bessent assured the Economic Club of Dallas that tariff revenue would remain “virtually unchanged” in 2026, but the 150-day limit on the new global tariff pressures Congress for long-term action.
For allies like India and the EU, the uncertainty is alarming. “The tariffs at issue here may or may not be wise policy,” Kavanaugh noted, but the ruling limits presidential overreach and forces reliance on Congress for lasting changes.
Small businesses, from US furniture retailers to global exporters, face serious threats. The US trade deficit stood at $901 billion in 2025, barely affected by prior tariffs, according to CNBC.
What’s Next for US Trade Deals?
As Trump prepares for his State of the Union address, the world watches closely. Will Congress extend the tariffs, or will renegotiations follow? For India, the EU, and Eastern partners, the message is clear, that US trade deals, once considered stable, now appear fragile amid judicial and executive clashes.
This uncertainty could slow investments and hinder global recovery. As Trump declared, “We have the right to do pretty much what we want to do,” but the Supreme Court’s ruling serves as a reminder that even presidents are not above the law.
