The US Supreme Court’s long-awaited ruling on tariffs imposed by President Donald Trump is expected on January 14, a decision that could have far-reaching implications for global markets, including India.
The verdict will determine whether Trump had the authority to impose sweeping import duties without Congressional approval. Markets are closely watching the outcome, as it could influence trade relations, capital flows, and investor sentiment across emerging economies.
In April last year, Trump imposed tariffs ranging from 10 percent to 50 percent on several US trade partners, describing the move as “Liberation Day”. The administration invoked emergency powers under the International Emergency Economic Powers Act (IEEPA), citing the widening US trade deficit.
However, lower federal courts later ruled that many of these tariffs exceeded presidential authority, noting that the US Constitution grants Congress the power to levy import duties. The Supreme Court is now set to give a final word on whether emergency provisions can be used to justify broad trade tariffs.
Legal observers say this is the first time the top court is directly ruling on the legality of Trump’s tariff regime. During arguments in November, even the court’s conservative majority reportedly raised concerns over the expansive use of emergency powers.
Market experts see a strong possibility of the verdict going against Trump, which could offer relief to Indian equities.
VK Vijayakumar, chief investment strategist at Geojit Investments, said a clear ruling striking down the tariffs would be positive for India, which has been among the worst affected by the higher duties.
“If the Supreme Court declares Trump’s tariffs illegal, Indian markets could see a sharp relief rally. India has faced significant pressure due to the 50 percent tariffs,” he said.
However, he added that the market reaction will depend on whether the court fully invalidates the tariffs or only strikes them down partially.
Charu Pahuja, director and chief operating officer at Wise Finserv, said markets are unlikely to treat the verdict as a purely legal event. “If the ruling is seen as expanding the US administration’s power to impose tariffs, trade tensions could return quickly. That may lead to short-term volatility in Indian equities,” she said.
Export-oriented sectors may face immediate pressure, while domestic and defensive sectors are expected to remain relatively insulated. Pahuja stressed that India’s long-term growth story remains intact and any market impact is likely to be temporary.
Even if the court rules against Trump, uncertainty will not fully disappear. The US President could still seek Congressional approval to reintroduce tariffs.
India also faces fresh trade risks amid renewed US pressure on Russian oil buyers. Republican Senator Lindsey Graham recently said Trump supports a Russia sanctions bill that could push tariffs as high as 500 percent on countries importing Russian crude.
This makes an early India–US trade agreement increasingly critical.
Precious metals are likely to remain volatile as markets digest the verdict along with broader geopolitical cues.
Anuj Gupta, an analyst, said gold has strong international support in the $4,300–$4,400 range, while domestic prices are supported between ₹1,20,000 and ₹1,30,000.
On the upside, resistance is seen near $4,500 globally and around ₹1,42,000 in India, with further resistance close to $4,700 or ₹1,50,000.
Jigar Trivedi of Reliance Securities noted that the recent rally in bullion prices has been driven by trade tensions involving the US, China, the EU and India.
“If the ruling goes against the US administration, safe-haven demand for gold and silver could weaken, triggering a correction. A ruling in favour of tariffs could have the opposite effect,” he said.
Overall, the Supreme Court’s decision is set to influence market sentiment across equities, commodities and currencies, at least in the near term.
(By arrangement with livemint.com)