Global traders see hope as Donald Trump’s tariffs head to U.S. Supreme Court; GTRI urges India to act

A U.S. court ruling against President Donald Trump’s sweeping tariffs has rekindled hope among global exporters of fairer access to the American market, even as the battle shifts to the Supreme Court in October. For India, however, the judgment has also exposed a critical vulnerability — its lack of a coherent response to the tariff shock.

The U.S. Court of Appeals for the Federal Circuit, in a 7–4 decision on August 29, ruled that Mr. Trump had exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by declaring trade deficits and fentanyl inflows as “national emergencies” to justify broad tariffs. The judges reaffirmed that tariff powers lie with Congress, not the president.

While the duties — up to 50% on imports from India and Brazil — remain in force until October 14, the Supreme Court is expected to take up the case later that month. The outcome could determine whether Mr. Trump’s tariff regime survives or collapses, reshaping global trade flows in the process.

Hopes rise abroad

Exporters worldwide, from Asian manufacturers to Latin American agribusinesses, see the court’s decision as the first real check on Mr. Trump’s aggressive tariff strategy since his return to the White House seven months ago.

Brazil, facing identical 50% tariffs since August 1, responded swiftly. Within days, it launched a $5.6 billion credit support program, deferred taxes, boosted export rebates, and began purchasing farm goods to shield producers. By late August, Brazilian beef exporters had already diverted shipments to Mexico, while the government moved at the WTO and threatened retaliatory duties under its Reciprocity Law.

India, by contrast, has yet to announce targeted relief. This has left its exporters — especially in labor-intensive sectors like garments, leather, and engineering goods — struggling with sudden cost escalations and shrinking competitiveness.

Trump’s defiance

Mr. Trump, for his part, has made clear he will not retreat. “ALL TARIFFS ARE STILL IN EFFECT!” he wrote on Truth Social after the court ruling, calling it “highly partisan.” He warned that removing tariffs would “literally destroy the United States of America,” insisting that they were vital to protect American manufacturers and farmers.

The administration has argued that striking down the tariffs would weaken U.S. foreign policy, undercut ongoing negotiations, and invite retaliation. Commerce Secretary Howard Lutnick said the duties were part of a broader strategy to defend national security.

India’s dilemma

The tariffs have left India particularly exposed. From an average U.S. duty of around 3% a year ago, Indian exports now face prohibitive 50% barriers, jeopardizing billions of dollars’ worth of goods from textiles to engineering components.

A new report by the Global Trade Research Initiative (GTRI) warns that India cannot afford to wait for the Supreme Court outcome in Washington. It urges New Delhi to roll out an immediate 10-point action plan to shield exporters and rebuild competitiveness in a protectionist world.

Among the proposals

Revive stalled schemes like the Market Access Initiative and Interest Equalisation Scheme, both of which have been suspended in FY2025, depriving MSMEs of critical support.

Operationalize pending announcements such as the Export Promotion Mission, Bharat Trade Net digital platform, and long-delayed e-commerce export hubs.

Fix structural bottlenecks in customs clearance, streamline RoDTEP benefits, and simplify the Advance Authorisation scheme.

Rebuild institutions by professionalising overseas trade missions and substantially increasing export promotion budgets.

The report stresses that without such steps, Indian exporters risk losing market share not only in the U.S. but globally, as competitors like Brazil adapt quickly and China undercuts prices with long credit terms.

Supreme Court showdown

The U.S. Supreme Court is expected to hear the case in the second half of October, in what could become a landmark ruling on the limits of presidential power. If the justices side with the lower courts, tariffs could collapse, giving India and other countries a reprieve. If they uphold Trump’s expansive use of IEEPA, tariffs could remain entrenched as a tool of executive geopolitics.

For now, the hope is fragile. Exporters remain burdened by high duties and disrupted supply chains. Diversifying away from the U.S. is not easy: major global retailers require years of proven compliance before shifting orders, and many emerging markets lack the scale to absorb large volumes.

A narrow window

Yet optimism is rising. The court ruling has signaled that the U.S. trading system may return to legal predictability rather than unilateral presidential action. For global traders, that itself is a glimmer of relief.

For India, however, the ruling is a warning. Unlike Brazil, it has yet to move decisively. The GTRI plan suggests that by cutting export costs 5–10% through revived schemes, streamlined procedures, and expanded funding, India could buy time for gradual diversification and avoid lasting damage.

As the world waits for the Supreme Court showdown in October, exporters see a path opening. Whether India seizes it — or remains flat-footed — will decide if hope translates into recovery.

This article is published in an arrangement with 5WH.