The court’s ruling was followed by a swift response from the Trump administration, which announced a blanket 15% global tariff under Section 122, a provision that allows temporary import restrictions for up to 150 days to address balance-of-payments deficits.
The brokerage noted that the effective US tariff rate now stands at around 14% after the Section 122 move, compared with roughly 16% before the ruling and nearly 28% at its peak in April 2025. This recalibration offers relief to countries that had faced steep reciprocal tariffs, placing most trading partners on a more level footing.
However, tariffs under Section 232, covering steel, aluminium, copper, and automobiles, remain in place. Emkay highlighted that the extent of relief will depend on countries’ exposure to these sector-specific duties, with nations such as Japan and South Korea more directly impacted due to auto exports, while India’s exposure is largely indirect through steel and aluminium inputs.
Emkay also noted that US customs revenue collected under IEEPA since April 2025 could amount to $140–175 billion, which may now need to be refunded, potentially creating a temporary fiscal impulse. While the ruling leaves ambiguity around refunds, the scale involved is significant.
While Section 122 buys the Trump administration time, Emkay said rebuilding the earlier breadth and intensity of tariffs may prove difficult. Alternative legal routes, such as Sections 232, 201, 301, and 338, are available, but they are either time-consuming, legally contestable, or sector-specific. Political considerations, including falling approval ratings and the upcoming midterm elections in November 2026, could also act as a restraint.
Emkay expects most nations to reassess their trade arrangements with the US. With headline tariffs now capped at 15% globally under Section 122, several countries may see little incentive to adhere to earlier, more demanding commitments on investment, market access, or non-tariff barriers.At the same time, the brokerage cautioned that global trade uncertainty is likely to persist as Washington explores alternative mechanisms.
For India, the ruling is viewed as a positive development. Emkay estimates that about 55% of India’s exports will now face only a 15% tariff, while roughly 40%, including electronics, pharmaceuticals, and petroleum products, remain exempt. The remaining exports are subject to Section 232 tariffs, but India’s direct exposure is limited.
“As a result, India’s effective tariff rate is likely to be in the 11-13% range, which compares favourably with China’s rate of above 15% and is broadly similar to other Asian peers,” the brokerage said. It added that while India may technically have room to resume purchases of Russian crude oil, it may choose to tread carefully to maintain stable ties with Washington.
