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Reciprocal tariffs announced by US government in April 2025, struck down by US Supreme Court
On 02 April 2025, the US government issued an Executive Order under the International Emergency Economic Powers Act (IEEPA) announcing ‘reciprocal’ tariffs across nearly all of their trading partners. The measure signalled a clear shift in US trade policy of maintaining minimal Customs duties to one of high import tariffs aligned with their stated objective of promoting domestic manufacture, strengthening domestic industry and recalibrating trade imbalances faced by the US.
Consequently, many Indian exports faced tariffs of up to 50%. On 07 February 2026, the US and India jointly announced a framework for an interim agreement on reciprocal and mutually beneficial trade. The framework included reduction of the reciprocal tariffs on Indian exports to 18% while India would reduce or eliminate its Customs Duty on a variety of US exports. It also announced both countries’ intent to continue negotiations toward a comprehensive U.S.-India Bilateral Trade Agreement (BTA), originally launched on 13 February 2025.
However, on 20 February 2026 the reciprocal tariffs announced by the US government on 02 April 2025, was struck down by the US Supreme Court, ruling that the IEEPA does not confer any authority to the Executive to impose tariffs.