India-US Trade Deal Stalls After SCOTUS Ruling Limits Trump’s Tariff Power

The sudden postponement of the India-U.S. trade negotiations marks a significant pivot in bilateral relations, triggered by a constitutional clash in Washington. The decision to delay the Washington DC summit, which was intended to finalize the legal text of a Phase 1 agreement, underscores the volatility introduced by the U.S. Supreme Court’s ruling. By affirming that the power to levy tariffs resides solely with the U.S. Congress, the court has effectively dismantled the executive branch's primary leverage in trade negotiations, forcing a total re-evaluation of the interim deal's viability and legal standing.

For the logistics and supply chain sector, this development introduces a layer of extreme uncertainty. India had been positioning itself as a critical 'China Plus One' alternative, hoping a trade deal would lower barriers for its manufacturing exports and streamline cross-border movement. However, President Trump’s retaliatory move—imposing a 10% universal tariff that was quickly escalated to 15%—effectively negates many of the advantages India hoped to secure through bilateral concessions. This blanket approach ignores the nuanced trade-offs negotiated over the past months, placing Indian exporters in the same restrictive basket as traditional U.S. trade adversaries.

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However, President Trump’s retaliatory move—imposing a 10% universal tariff that was quickly escalated to 15%—effectively negates many of the advantages India hoped to secure through bilateral concessions.

The short-term impact is a freeze on strategic planning for cross-border logistics and procurement. Companies that were preparing for a March signing and April implementation now face a 150-day window of heightened duties starting February 24. Furthermore, the Indian government faces intense domestic pressure. The opposition Congress party has seized on the U.S. Supreme Court ruling to label the current framework a 'surrender' of national interests, arguing that India should not negotiate while under the threat of universal tariffs that may now lack a firm legal basis under U.S. law. This political friction within India may force a harder line in future negotiations, potentially demanding the complete removal of the 15% duty before talks resume.

Industry analysts should closely monitor how the U.S. Congress reacts to its restored authority. If Congress asserts its role in trade policy, the 'interim' nature of the deal might require formal legislative approval—a much higher hurdle than an executive agreement. For the Modi government, the challenge is to maintain a strategic partnership without appearing weak to a domestic audience. Chief negotiator Darpan Jain and Commerce Minister Piyush Goyal must now determine if the concessions India offered—likely in sectors like dairy, medical devices, and ICT—still provide sufficient value if the U.S. executive branch cannot guarantee long-term tariff stability.

Ultimately, the 'cold storage' of these talks suggests that the era of quick, executive-led trade wins is over. Supply chain managers must brace for a period of 'litigated trade,' where every tariff and agreement is subject to judicial review and legislative oversight. The April implementation goal is now highly improbable, and the broader India-U.S. economic roadmap requires a fundamental redesign to account for the new constitutional reality in the United States. Logistics providers should prepare for sustained higher costs and potential retaliatory measures from New Delhi if the 15% tariffs remain in place.