The most significant test yet of Donald Trump’s trade policies begins this week, as the US Supreme Court hears a challenge that could overturn the sweeping tariffs he imposed on imports from nearly every major trading nation.
For Indian exporters — particularly in sectors such as engineering goods, textiles, auto components and speciality chemicals — the case could have far-reaching consequences. If the court rules the tariffs illegal, it may reset trade equations and ease pressure on exporters who have faced higher costs and market uncertainty since the levies began.
The Trump administration is defending its global tariff strategy against a coalition of small businesses and US states that claim most of the duties are unconstitutional. If the justices side with them, the government could be forced to refund part of the billions collected through these import taxes, and Trump’s entire trade war approach could unravel.
The final verdict is expected early next year, after months of deliberation, but the decision could redefine the limits of presidential power in trade policy.
Trump has reportedly warned that a defeat would restrict his ability to negotiate with other countries and threaten national security. He has said he would skip attending the hearing to avoid drawing attention away from the proceedings. Earlier, he had remarked that losing the case could “weaken” the US and plunge it into financial distress for years.
The tariffs have disrupted operations across industries. Learning Resources, a US-based educational toy maker, expects to pay $14 million in tariffs this year — seven times more than in 2024. Its chief executive said the company has had to relocate the production of hundreds of products to cope with the sudden policy changes.
Georgia-based Cooperative Coffees, which imports beans from over a dozen countries, has already paid about $1.3 million in tariffs since April. The firm’s co-founder said businesses were preparing for the possibility that the tariffs could remain even if they were hoping the court would strike them down.
The case hinges on how far presidential powers extend under the 1977 International Emergency Economic Powers Act (IEEPA) — a law that allows the president to act swiftly during national emergencies. Trump used it to impose tariffs on China, Mexico and Canada in February, citing drug trafficking, and expanded it in April to nearly all nations, arguing that the US trade deficit posed an “extraordinary threat”.
Critics say the law does not authorise tariffs and that only Congress can levy taxes under the US Constitution. More than 200 Democratic lawmakers and one Republican senator have filed a brief supporting that argument.
Three lower courts have already ruled against the administration. Analysts estimate about $90 billion in import taxes could be affected — nearly half the tariff revenue the US collected this year through September.
The case has already delayed trade deals, including a July agreement with the European Union that fixes tariffs at 15 percent on European goods. Switzerland’s chocolatier Daniel Bloch said his firm has absorbed a third of the cost of new US tariffs to protect sales, erasing profits.
Even if the administration loses, it has indicated plans to reimpose duties under other laws. For global exporters — including Indian firms — the uncertainty around America’s trade direction is likely to persist well into 2025.