US Supreme Court ruling on tariffs: why Emkay sees India as beneficiary amid Trump’s slip-ups

The US Supreme Court’s decision to strike down President Donald Trump’s reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA) has paved the way for a new reset in global trade dynamics, with immediate implications for India and other emerging markets. Emkay described the development as likely a trade restart, noting that while the US has lost some immediate leverage under the sweeping IEEPA framework, the impact may be smaller and less damaging than the 2025 tariff escalation.The court’s ruling was followed by a swift response from the Trump administration, which announced an across-the-board global tariff of 15% under Section 122, a provision that allows temporary import restrictions of up to 150 days to address balance of payments deficits.

The brokerage noted that the effective U.S. rate after the Section 122 measure is now about 14%, compared to roughly 16% before the ruling and nearly 28% at its peak in April 2025. This recalibration provides relief for countries that had faced high reciprocal tariffs, putting most trading partners on a more equal footing.However, Section 232 tariffs, which cover steel, aluminum, copper and automobiles, remain in effect. Emkay emphasized that the extent of relief will depend on countries’ exposure to these sector-specific duties, with countries like Japan and South Korea more directly affected by auto exports, while India’s exposure is largely indirect through steel and aluminum inputs.

Emkay also noted that U.S. customs revenues collected under IEEPA since April 2025 could amount to $140 billion to $175 billion, which may now have to be repaid, potentially creating a temporary budget boost. Although the ruling leaves ambiguity regarding refunds, its magnitude is significant.

While Section 122 buys the Trump administration time, Emkay said rebuilding the tariffs’ previous breadth and intensity could prove difficult. Alternative legal routes are available, such as Articles 232, 201, 301 and 338, but these are time-consuming, legally questionable or sector-specific. Political considerations, including declining approval ratings and the upcoming midterm elections in November 2026, could also act as a brake.

Emkay expects that most countries will reassess their trade agreements with the US. With overall Section 122 tariffs capped at 15% globally, several countries may see little incentive to adhere to previous, more demanding obligations on investment, market access, or non-tariff barriers. At the same time, the brokerage warned that uncertainty over global trade is likely to persist as Washington explores alternative mechanisms.

The ruling is seen as a positive development for India. Emkay estimates that about 55% of India’s exports will now face a tariff of just 15%, while about 40%, including electronics, pharmaceuticals and petroleum products, will remain exempt. The remaining exports are subject to Section 232 tariffs, but India’s direct exposure is limited.

“As a result, India’s effective rate is likely to be between 11 and 13%, which compares favorably with China’s rate of over 15% and is broadly comparable to other Asian countries,” the broker said. It added that while India technically has scope to resume purchases of Russian crude, the country may choose to proceed cautiously to maintain stable ties with Washington.