In a landmark 6-3 decision, the U.S. Supreme Court struck down many of President Donald Trump's sweeping country-specific and global tariffs. The court ruled that the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the president unilateral authority to impose broad import taxes without explicit congressional approval.

Chief Justice John Roberts, writing for the majority, stated that the Constitution clearly gives Congress the sole power to tax and that the IEEPA was intended for managing specific national emergencies, not for overhauling trade policy.

Two Trump appointees, Justices Neil Gorsuch and Amy Coney Barrett, joined the three liberal justices and the Chief Justice in the majority. Justices Thomas, Alito, and Kavanaugh dissented.

The ruling invalidates the so-called "Liberation Day" tariffs (ranging from 10% to 50%) and duties targeting China, Mexico, and Canada over fentanyl trafficking.

Industry-specific duties on steel, aluminium, and automobiles (imposed under Section 232 of the Trade Expansion Act of 1962) remain in place as they were not part of this specific legal challenge.

U.S. stock markets responded positively to the ruling, with the S&P 500 and Nasdaq seeing gains shortly after the announcement.

The U.S. may be required to refund between $100 billion and $175 billion in collected revenue to thousands of importers.

Impact on the Indian chemical industry

The recent ruling marks a pivotal shift for India’s chemical sector, offering immediate relief to an industry long burdened by heavy duties.

By nullifying the 25% reciprocal tariff on goods like organic chemicals, the decision directly bolsters EBITDA margins and offsets the previous 25–45% price surge caused by trade and logistics costs.

Additionally, Indian exporters may now be eligible for a share of the $175–$200 billion in global tariff refunds.

However, analysts caution that the return to Most Favoured Nation (MFN) rates eliminates the competitive edge India briefly held over regional rivals like Vietnam and Thailand under the prior interim deal.