Trump Raises Global Tariffs to 15%: Impact on India and Trade

A New Chapter in US Trade Policy

In a swift response to a US Supreme Court ruling that invalidated his previous sweeping duties, former President Donald Trump has imposed a new global tariff, escalating the rate to 15%. The new levy, which took effect on Tuesday, February 24, 2026, marks a significant pivot in US trade strategy and has introduced fresh uncertainty into global markets, directly impacting major trading partners like India. This move bypasses the legal challenges of the previous plan by invoking a different, older piece of legislation.

The Rapid Sequence of Events

The situation unfolded rapidly over a few days. On Friday, the US Supreme Court declared Trump's earlier tariffs illegal, stating that he had violated an emergency-powers law by imposing broad duties without explicit congressional approval. Within hours, Trump signed an executive order authorizing a new, temporary 10% global tariff under Section 122 of the Trade Act of 1974. By Saturday, he announced an increase in this new levy to 15%, the maximum level permitted under that specific law. The US Customs and Border Protection agency confirmed it would begin collecting the new tariff from 10:31 AM IST on Tuesday.

Legal Authority and Limitations

The new tariff relies on Section 122 of the Trade Act of 1974, a provision that allows the president to impose temporary duties of up to 15% to address significant balance of payments problems. A key distinction from the previous tariffs is its temporary nature. The proclamation is valid for only 150 days. After this period, the tariffs will automatically expire unless the US Congress votes to extend them. This legislative constraint sets a clear timeline for the administration and adds another layer of political complexity to the trade dispute.

Impact on India's Trade Dynamics

For India, the new tariff structure alters the trade landscape significantly. Prior to this, tariffs on Indian goods had fluctuated, at one point reaching as high as 50% due to a combination of reciprocal and punitive duties. A recent interim trade deal framework had aimed to reduce this to 18%. With the new 15% global tariff, the effective duty on Indian exports to the US is now expected to be around 18.5%, calculated by adding the 15% surcharge to the existing Most Favored Nation (MFN) duties, which average about 3.5%. In response to the uncertainty, planned talks between chief trade negotiators from India and the US, scheduled for February 23, have been postponed.

US Tariff Timeline: A Summary

Global Reactions and Market Uncertainty

The sudden policy shift has been met with caution globally. The European Union announced it would freeze the ratification of its trade agreement with the US until there is more clarity on the tariff plans. European Central Bank President Christine Lagarde emphasized the need for certainty, stating it is "critically important" for global trade. The move has prolonged the period of instability for international businesses, which now face a new set of calculations for their supply chains and pricing strategies.

Exemptions Under the New Order

The new tariff proclamation is not all-encompassing. It retains several key exemptions that were in place previously. Goods from Canada and Mexico that comply with the US-Mexico-Canada Agreement (USMCA) are not subject to the levy. Additionally, certain product categories, including pharmaceuticals, some agricultural products, aerospace components, passenger cars, and some light trucks, continue to be excluded from the tariff. This provides some relief for specific industries and neighboring trade partners.

The Question of Previously Collected Tariffs

The Supreme Court's ruling has also raised a significant financial question: what will happen to the estimated $133 billion in import taxes already collected under the now-invalidated tariff regime? Trade law experts suggest that importers are likely to receive refunds, but the process is expected to be complex and prolonged. This has created a "perpetual fight" scenario for many small businesses that have borne the cost of these duties, adding another layer of economic consequence to the trade policy saga.

Political and Economic Context

The tariff announcement came just hours before Trump's State of the Union address, where his economic agenda is a central theme, especially with midterm elections approaching. Public sentiment appears divided. A recent poll indicated that 64% of Americans disapprove of his handling of tariffs, compared to 34% who approve, highlighting growing concerns over the impact on consumer prices.

Conclusion: A 150-Day Period of Watchfulness

The imposition of a 15% global tariff has reset the terms of international trade with the United States. While legally distinct from its predecessor, the new levy continues a policy of protectionism that creates significant challenges for global partners like India. The next 150 days will be critical, as businesses and governments await further clarity from Washington and monitor whether the US Congress will act to extend, modify, or let the tariffs expire.