After US SC setback, Trump may use older trade laws to revive tariff powers

With the Supreme Court striking down Trump's use of IEEPA for tariffs, the former president may rely on older trade statutes to revive tariff action. Each carries implications for India

The United States (US) Supreme Court striking down the use of the International Emergency Economic Powers Act (IEEPA) in imposing country-specific “reciprocal” tariffs has forced President Donald Trump and his trade team to look for alternative legal routes to revive tariff action.

 

While no statute gives the President the same sweeping powers the IEEPA does, Trump still has a broad arsenal of trade tools. Here is a breakdown of the tariff weapons available to him and what each one means for India.

 

1. Section 232--National Security Tariffs  This Section of the Trade Expansion Act, 1962, allows the President to impose tariffs or quotas if imports are found to threaten national security. The commerce department conducts the investigation, but the President alone decides the remedy. Section 232 has no fixed tariff ceiling, no expiry, and has previously been used to hit steel and aluminium imports.

 

How it concerns India: India was hit in 2018 by Trump’s steel and aluminium tariffs under Section 232. Renewed action would immediately affect India’s exports of metals, auto-components, and pharma.

 

2. Section 301--Unfair Trade Practices

 

Section 301 of the Trade Act, 1974, authorises the US Trade Representative (USTR) to investigate and retaliate against foreign policies that are “unreasonable, unjustifiable, or discriminatory” and burden US commerce. If negotiations fail, the President can approve targeted tariffs or other restrictions. Section 301 was the legal engine behind Trump’s tariffs on roughly $370 billion of Chinese goods. 

How it concerns India: The country faced a Section 301 investigation in 2018 over price controls on medical devices and market-access barriers. A new 301 probe — on digital policies, ecommerce rules, pharma pricing, or tariffs on ICT (information, communication, and technology) products — would threaten India’s exports in information-technology (IT) hardware, pharmaceuticals, and services.

 

3. Section 122--Balance of payments tariffs

 

Section 122 of the Trade Act, 1974, allows the President to impose a temporary, across-the-board import surcharge of up to 15 per cent if the US faces a “large and serious” balance-of-payments deficit. Tariffs can last 150 days unless extended by Congress. This Section is now the default tool for fast, global tariff action by the President. 

How it concerns India: A 15 per cent across-the-board surcharge brings down the prevailing 28 per cent tariff for India but takes away the preferential advantage it would have enjoyed against its Asian peers at the negotiated 18 per cent. This also makes the negotiated interim trade deal irrelevant for the time being.

 

4. Section 201--Safeguard Tariffs

 

Section 201 of the Trade Act, 1974, authorises safeguard tariffs or quotas when a surge in imports causes, or threatens to cause, serious injury to domestic industry. The US International Trade Commission determines injury, and the President chooses the remedy. Safeguards are temporary, usually lasting three-four years. Unlike Section 232 or 301, safeguards do not require allegations of unfair trade — just increased import volumes. 

How it concerns India: The country is a major supplier in several sectors susceptible to a surge — solar modules, steel products, tyres, chemicals, textiles, and auto parts. A Section 201 case in any of these categories would immediately curtail India’s exports even when there is no allegation of wrongdoing.

 

5. Anti-dumping (AD) & countervailing duties (CVD)

 

Action on anti-dumping (Section 731) and countervailing duties (Section 701) under the Tariff Act, 1930, allow the US government to impose punitive duties on imports sold below fair value or subsidised by foreign governments. Although not directly ordered by the President, these cases are run by the commerce department and the US International Trade Commission — both part of the executive branch — giving the administration indirect control. AD/CVD duties are legally durable, product-specific, and politically popular, making them some of the most frequently used trade tools.

 

How it concerns India: The country is routinely targeted in AD/CVD cases — chemicals, steel products, pharma intermediates, tyres, IT hardware inputs. A protectionist US administration could amplify these cases.

 

6. Section 338 — Retaliatory tariffs

 

This Section under the Tariff Act, 1930, authorises the President to raise tariffs or impose restrictions against countries that apply “unreasonable or discriminatory” duties or trade barriers against US goods. While rarely used in modern trade policy, the authority remains legally valid. 

How it concerns India: If US exporters — especially agriculture, dairy, ICT, or medical devices — claim discriminatory treatment, the White House could threaten or deploy this.