The year 2026 has brought major shifts in the trade relationship between the United States and India. If you have been following the news, you might know that US President Donald Trump recently announced massive changes to import taxes, also known as tariffs. However, a historic ruling by the US Supreme Court has just turned those plans upside down.
For India, these fast-moving events in Washington have created a unique, temporary advantage. Here is a complete breakdown of what exactly happened, how President Trump is responding, and what this means for Indian businesses and the economy.
What Happened: US Supreme Court Strikes Down Trump’s Tariffs
On February 20, 2026, the US Supreme Court made a massive decision that shocked the global economy. In a 6-3 ruling, the court stated that President Donald Trump did not have the legal power to impose his sweeping global tariffs.
Previously, Trump had used a national emergency law to heavily tax goods coming into the United States from other countries, including India. The Supreme Court ruled that this move was illegal because only the US Congress has the power to impose such taxes. This decision was seen as a major defeat for the Trump administration’s economic agenda and was welcomed by US trading partners worldwide.
Trump’s Quick Reaction and the New 10% Global Tariff
President Trump reacted strongly to the Supreme Court’s decision. During a press briefing at the White House, he expressed deep disappointment, calling the ruling a reversal of his efforts to protect American businesses.
However, he did not back down. Almost immediately, Trump announced a brand-new 10% global tariff on imported goods. Because the court blocked his use of emergency powers, he is now using a different trade law from 1974 to enforce this new tax. This new 10% import duty is set to be active for 150 days, starting on February 24, 2026.
What This Means for India: A Temporary Relief
To understand how this affects India, we have to look at what happened just a few weeks prior. In early February 2026, Prime Minister Narendra Modi and President Trump agreed on a new trade deal. Under that original agreement, the US lowered its massive 50% tariff on Indian goods down to 18%. In return, India agreed to reduce its purchase of Russian oil and buy more American products.
Now, because of the Supreme Court ruling and Trump’s new temporary rules, India’s situation has changed again. Instead of paying the agreed 18%, Indian exporters will temporarily face a much lower tariff rate of just 10%. This sudden drop is a positive surprise for Indian industries, especially those exporting textiles, gems, and pharmaceuticals to the United States.
President Trump has made it clear that the broader agreement with India remains active. When asked by reporters about the future of the India-US relationship, Trump stated that the deal is still on track and described his relationship with India as fantastic. He noted that while the methods of applying the tariffs have changed, the core trade agreement stands.
The Future of India-US Trade Relations
While the drop to a 10% tariff is good news for Indian exporters right now, the situation remains slightly unpredictable. The new US policy is only temporary, designed to last for 150 days.
Read More : Vikram Bhatt 2026 Update
Back in India, the government is closely monitoring the situation. An Indian delegation is expected to travel to the US soon to finalize the official paperwork of the bilateral trade deal. Meanwhile, opposition leaders in India have raised questions about the fairness of the broader trade agreement, asking the government to ensure that Indian farmers and small businesses are fully protected in the long run.
Ultimately, the India-US trade relationship is going through a period of heavy adjustment. Both nations are working hard to balance their own economic interests while maintaining their strong democratic alliance.
Frequently Asked Questions (FAQs)
Why did the US Supreme Court cancel Donald Trump’s tariffs?
The Supreme Court ruled that President Trump used emergency powers illegally to apply the taxes. The court stated that under the US Constitution, only Congress has the clear authority to impose such sweeping tariffs.
What is the new tariff rate for Indian goods going to the US?
Starting February 24, 2026, Indian goods will face a temporary 10% tariff. This is a drop from the 18% rate that was recently agreed upon by both countries.
Is the India-US trade deal cancelled?
No, the trade deal is not cancelled. President Trump confirmed that the agreement between him and Prime Minister Modi is still active, even though the specific tax rules have temporarily changed.
How long will this new 10% tariff last?
The new 10% global tariff introduced by the Trump administration is designed to last for a period of 150 days. After that, new rules or agreements will need to be put in place.