GTRI urges India to reassess US trade deal After Supreme Court’s Trump tariff ruling

The Global Trade Research Institute (GTRI) has called on India to reassess its trade agreement with the United States after the US Supreme Court ruled that President Donald Trump exceeded his authority by imposing additional tariffs under the International Emergency Economic Powers Act (IEEPA). This decision comes as India and the US are in advanced negotiations over an interim trade deal, with Indian officials due to travel to Washington to finalise the agreement’s text. The timing of the Supreme Court’s ruling, just weeks after both nations issued a joint statement outlining the contours of the deal, adds fresh complexities to the negotiations and may influence India’s approach to ongoing talks.

On 20 February 2026, Chief Justice John Roberts stated that the IEEPA does not authorise unilateral tariff action and that the Trump administration cited no statute permitting such measures. The Court’s decision follows Trump’s announcement of an additional 100% tariff on Chinese imports, raising total US duties to about 130%. The move, seen as a major escalation in US-China trade tensions since 2018, was in response to China’s restrictions on rare-earth exports, which are critical for US defence, clean-energy, and technology sectors.

Proceed with caution

In its analysis, GTRI warned that “no deal with the US is ever final.” The think tank recommended that India proceed with caution in its negotiations and emphasised the need for “equal terms,” as well as safeguarding strategic autonomy. GTRI further advised India to avoid depending on “shifting US promises,” and instead prioritise self-reliance in critical technologies and minerals to protect against future trade shocks.

The recent removal of reciprocal tariffs frees about 55% of India’s exports to the US from the previous 18% duty. These goods will now only be subject to standard most-favoured nation (MFN) tariffs according to global trade rules. However, Section 232 tariffs of 50% on steel and aluminium and 25% on certain auto components will remain, while products comprising around 40% of India’s export value, such as smartphones, petroleum products, and medicines, remain exempt from US tariffs, according to GTRI.

US-China trade dispute

The GTRI report highlighted the risks posed by the ongoing US-China trade dispute, particularly the impact of China’s dominance in rare-earth minerals. “The impact will be felt quickly. Prices of EVs, wind turbines, and semiconductor parts are expected to rise, while the US will try to “friend-shore” its mineral supply chains to Australia, Vietnam, and Canada. China, meanwhile, is likely to redirect supplies toward its non-Western partners to strengthen alternative industrial networks,” GTRI said.

GTRI noted that Washington remains heavily reliant on Beijing for a range of goods, including electronics, textiles, footwear, white goods, and solar panels. The report pointed out that should the US seek support from its allies, the costs for these materials could increase further, as these countries cannot rapidly match China’s rare-earth supply capabilities.

The think tank observed that “unlike the US, which often acts before weighing economic consequences, China appears more deliberate and better prepared,” underscoring China’s strategic approach in the ongoing tariff and supply chain disputes.

GTRI also suggested that India should capitalise on its neutral position by strengthening partnerships with both Western and BRICS nations. According to the report, advancing negotiations without compromising on key interests and focusing on greater self-reliance in strategic sectors would better insulate the Indian economy from unpredictable shifts in global trade policies.