The Trump administration has yet to recover from the major setbacks it faced in the lower court over import tariffs. Seeking urgent relief, Trump asked the Supreme Court to hear the appeal against the ruling at the earliest. He warned, “If these tariffs are repealed, it will turn the United States into a third world country.” His remarks followed an appeals court decision that found most of the tariffs he had imposed to be illegal and an abuse of power.
Seven out of the 11-member panel of judges ruled against Trump, making the setback even more significant. This development has become a matter of grave concern for the administration. Although the appeals court has stayed the ruling until October 14, Trump immediately announced that he would appeal to the Supreme Court. At the same time, he is demanding that a ruling on the tariffs be delivered without delay.
Trump also pointed to the sharp decline in the US stock market following the appeals court decision. In an unusual statement, he suggested that he wanted a ‘stock market tariff.’ The lower court and the appeals court had both ruled that the 50% tariff announced by Trump under the International Emergency Economic Powers Act was unlawful, making clear that only the US Congress has the authority to declare tariffs.
Courts question tariffs as US markets react with unease
If the Supreme Court upholds this position, most of the tariffs imposed on countries including Canada, Mexico, and India will be invalid. For India in particular, the tariff burden would be reduced from 50% to 15%. At present, the second Trump administration has already collected $142 billion in tariffs (about ₹12.5 lakh crore). If it loses in court, this amount would need to be refunded, an outcome that would be financially devastating for Washington.
Currently, Trump’s tariffs apply to 70% of all products entering the United States. If the courts strike them down, they will cover only 16% of products. This will be a massive setback for Trump. It will also erode the ability of the United States to dominate tariff and trade negotiations with other countries. Trump is fighting hard to prevent such a scenario. The imposition of tariffs initially appeared to be a gain for the US government. For instance, in May the government recorded a revenue deficit of $316 billion, while in June it registered a revenue surplus of $27 billion.
Even as his tariff policy faces collapse in US courts, Trump has hardened his stance on India. He claimed that the US has only marginal trade with India, but that India enjoys access to a large American market. According to Trump, India imposes heavy tariffs on US products. India has the highest tariffs in the world. US products cannot be sold in India because of that. But the US has imposed negligible tariffs on Indian products. Now that has changed. He made it clear that the 50% tariff announced on India would not be reduced under any circumstances.
Meanwhile, US stock markets fell again on concerns that Trump will face another defeat in the Supreme Court. The looming question is whether the collected tariffs will have to be refunded in full. The Dow Jones fell 0.55%, the Nasdaq dropped 0.82%, and the S&P 500 index declined 0.69%. In the futures market, the S&P 500 index rose 0.2%, the Nasdaq 0.3%, while the Dow slipped 0.1%. The stock market also faced pressure as bond yields rose amid speculation that tariff refunds might be required. The US government’s 10-year Treasury yield climbed to 4.28% from 4.26%, underlining investor anxiety.
India’s rural revival and semiconductor push signal economic strength
Even as the tariff storm unleashed by Donald Trump casts a shadow over global trade, the Indian market continues to display resilience. The upcoming meeting of the GST Council on the 3rd and 4th of this month has become a beacon of hope, with expectations that consumer prices will see some relief.
The strongest signal of confidence comes from India’s rural economy. The massive revival in the rural market is shining as a bright spot. Consumer spending there has reached its highest level in the past 15 years, and sales of Fast Moving Consumer Goods (FMCG) are steadily increasing. This revival highlights the enduring strength of India’s domestic demand even in the face of global turbulence.
Companies such as ITC, Marico, and Dabur are at the forefront of this growth, with their export reports for 2024–25 reflecting strong performance. The resilience of rural India demonstrates how the country is weathering global storms triggered by Trump’s misguided tariff policies, proving once again that the Indian economy continues to push forward despite external challenges.
Adding to this positive momentum, Prime Minister Narendra Modi underlined India’s economic strength at the three-day Semicon India conference in Delhi. He said the country’s GDP had grown by 7.8 per cent despite global uncertainties and challenges driven by economic self-interest. Highlighting India’s growing role in the semiconductor sector, he remarked, “In the world of semiconductors, oil is black gold, while chips are digital diamonds. The power of the 21st century is the chip. The world is ready to build a semiconductor future with India.” His words echoed the confidence of an economy that remains on the rise, even as others falter under flawed tariff policies and economic short-sightedness.
