The court’s ruling was followed by a swift response from the Trump administration, which announced 15% global tariffs under Section 122, which allows temporary import restrictions for up to 150 days to address balance-of-payments deficits.
The brokerage noted that the effective US tariff rate after the passage of Section 122 is now about 14%, up from about 16% before the ruling and about 28% at its peak in April 2025. This recovery provides relief to countries that have overstepped most trading level partners.
However, tariffs remain in place under Section 232 covering steel, aluminium, copper and automobiles. MK highlighted that the extent of relief depends on countries’ exposure to these sector-specific duties, with nations like Japan and South Korea more directly affected due to auto exports, while India’s exposure is mostly indirect through steel and aluminum inputs.
MK also noted that US customs revenue collected under the IEEPA from April 2025 could amount to $140-175 billion, which may now need to be refunded, potentially creating a temporary fiscal stimulus. While the ruling leaves ambiguity around refunds, the scale involved is significant.
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While Section 122 buys the Trump administration time, Emke said rebuilding the previous breadth and intensity of tariffs could prove difficult. Alternative legal avenues, such as Sections 232, 201, 301 and 338, are available, but are either time-consuming, legally contestable or sector-specific. Political considerations, including declining approval ratings and the upcoming midterm elections in November 2026, may also act as restraints.
MK expects most nations to reassess their trade arrangements with the US. With headline tariffs globally now capped at 15% under Article 122, many countries may see little incentive to comply with earlier, more demanding commitments on investment, market access or non-tariff barriers.
At the same time, brokerages warn that global trade uncertainty is likely to continue as Washington explores alternative mechanisms.
This judgment is seen as a positive development for India. MK estimates that about 55% of India’s exports will now face only a 15% tariff, while about 40%, including electronics, pharmaceuticals and petroleum products, will 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 range of 11-13%, which compares favorably with China’s rate of over 15% and is largely in line with other Asian peers,” the brokerage said. It added that while India may technically have room to resume buying Russian crude oil, it may choose to tread carefully to maintain stable relations with Washington.
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