Beyond the Numbers: Will China and India Capitalize on the US Tariff Twist?

The Supreme Court’s landmark ruling on Trump’s “Liberation Day” tariffs has reshuffled the deck in Washington’s trade relationships with Beijing and New Delhi — but neither side is playing its hand just yet.

On the morning of February 20, 2026, President Donald Trump was in a closed-door White House meeting with state governors when a trade adviser slipped him a handwritten note. “So it’s a loss, then?” Trump reportedly said aloud. Within hours, the Supreme Court’s 6-3 ruling in Learning Resources, Inc. v. Trump had detonated across global trading floors from Mumbai to Shanghai — and the reverberations have yet to subside.

The court’s verdict, delivered by Chief Justice John Roberts and joined by an unusual coalition of conservative and liberal justices, was unambiguous: the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. Gone, at a stroke, were the sweeping “Liberation Day” levies — duties that had ranged as high as 145% on Chinese goods and 26% on Indian exports in their peak form. As reported by the Tax Foundation, more than $160 billion in duties had been collected under the now-illegal framework, and the tariffs had been projected to generate $1.4 trillion over the next decade.

Trump moved fast, signing an executive order hours later imposing a temporary 10% global tariff under Section 122 of the Trade Act of 1974 — a rarely invoked provision that limits duties to 150 days without congressional approval. By Saturday, he had ratcheted the announced rate up to 15%. The whiplash, as one Citigroup economist noted, implied “little change in the effective tariff rate or inflation forecasts in the near term.” But the strategic calculus for Asia’s two largest economies shifted dramatically nonetheless.

The Tariff Landscape Before and After: What Actually Changed

To understand the opportunity — and the risk — for China and India, it helps to map the actual numerical terrain.

*Per Maybank IBG Research analysis

Bloomberg Economics calculated that Trump’s proposed 15% global rate would produce an average effective tariff of around 12% — the lowest since “Liberation Day” tariffs were released in April 2025. China, India, and Brazil emerged, in the words of the analysis, as “the biggest winners from the Supreme Court’s decision.”

Yet winning in absolute tariff terms is not the same as winning strategically. The picture is considerably more complicated.

China: A Tactical Windfall, Not a Strategic Reprieve

For Beijing, the ruling arrives at a diplomatically sensitive moment. Trump is scheduled to visit China from March 31 to April 2, 2026, for what will be the highest-stakes trade summit since his first term. The Supreme Court decision has altered the pre-meeting power dynamics in ways that Chinese negotiators will carefully — and quietly — exploit.

As the Council on Foreign Relations noted, the ruling “narrows unilateral presidential trade powers, constrains improvisational coercion, and shifts the terrain of U.S.-China competition away from executive brinkmanship to institutional process.” Trump enters Beijing with one fewer unilateral lever — and Chinese negotiators know it.

China’s public response has been characteristically calibrated. Beijing’s Commerce Ministry declared it was conducting a “comprehensive assessment” of the ruling’s impact, calling on Washington to “cancel its unilateral tariff measures on its trading partners” and warning that “there are no winners in a trade war.” That language — restrained, multilateralist, positioning China as the aggrieved rule-follower — is deliberate. Beijing is framing the ruling as validation of its long-standing critique that US trade policy violates both international norms and, as it turns out, US domestic law.

The arithmetic backs the posture. Crucially, the 10% flat tariff is meaningfully lower than the pre-ruling rate for Chinese goods. Analysts at one major bank noted that “the effective tariff rate will fall this year and that the world post-SCOTUS will see lower tariffs than the pre-SCOTUS world.” For Chinese exporters who had been dealing with cumulative duties far exceeding 30%, a 10–20% effective rate — before Section 301 levies on specific goods — represents real relief.

But the relief is partial and fragile. As The Associated Press reported, Section 301 of the 1974 Trade Act remains fully intact, and US Trade Representative Jamieson Greer announced Friday that the administration was “launching a series of 301 investigations” following its Supreme Court loss. Those “sticky tariffs,” as one trade lawyer put it, have been in place for eight years across two administrations, targeting Chinese technology, electric vehicles, and advanced manufacturing. The ruling did not touch them.

China’s countermeasures strategy is also evolving. With the reciprocal and fentanyl-related IEEPA tariffs on China suspended — they had reached a combined 24% — Beijing indicated a willingness to adjust its own retaliatory posture, signaling readiness for “candid consultations” before Trump’s arrival. That is diplomatic language for: we are willing to negotiate, but we hold more cards than we did last week.

India: Strategic Pause, or Strategic Hesitation?

India’s response has been more visibly disruptive. New Delhi became the first country to take a concrete step in response to the ruling, postponing its trade delegation’s planned trip to Washington to “finalise the legal text” of an interim trade deal that Trump had announced earlier in February. No new date has been set.

The deferral is understandable. India had negotiated a framework that pegged its tariff rate at 18% — a meaningful reduction from the previous 26% under IEEPA, and a result secured after considerable diplomatic effort by Prime Minister Narendra Modi’s government. Then, in a matter of days, the baseline for every country dropped to 10–15%, effectively eroding the competitive advantage India had worked to secure.

The situation is further complicated by the Trump administration’s decision, just four days after the Supreme Court ruling, to impose a 125.87% preliminary countervailing duty on solar cell imports from India under a separate trade investigation. As India Briefing reported, the targeted measure underscores how the ruling addresses emergency tariff authority, but leaves sectoral tools fully operative. For New Delhi, the tariff environment remains as volatile as ever.

Moody’s noted that “the Supreme Court’s intervention restricts Washington’s ability to deploy country-specific tariffs as a negotiation tool,” a constraint that “could reduce US leverage in bilateral trade talks.” That cuts both ways for India. Washington has less coercive power; but India also has less urgency to sign deals quickly.

India is also, quietly, revisiting its stance on Chinese investment. Reports indicate New Delhi is reviewing “Press Note 3,” the 2020 policy that placed strict scrutiny on foreign direct investment from countries sharing land borders — principally China. A tiered approval framework may emerge, reflecting India’s pragmatic recognition that it needs capital and technology inflows even as it manages strategic competition with Beijing.

The Geopolitical Chessboard: What Numbers Cannot Capture

Headline tariff rates are, as experienced trade negotiators know, only one variable in a far more complex equation. Energy security, technology supply chains, domestic political constituencies, and investment commitments all shape negotiations in ways that percentage points cannot fully represent.

For China, the structural competition with the US in semiconductors, artificial intelligence, and green technology remains fundamentally unchanged. The CFR’s Zongyuan Zoe Liu observed that “the structural factors driving U.S.-China strategic rivalry — technological competition, industrial policy clashes, and security tensions — remain unchanged.” What the ruling provides China is a modest tactical advantage: the moral authority of having been vindicated by America’s own highest court, and a negotiating room in which Trump arrives slightly disarmed.

For India, the geopolitical calculus is particularly delicate. New Delhi has spent years cultivating a “strategic autonomy” posture — deepening ties with Washington through initiatives like the Quad while maintaining its historical equidistance from great-power blocs. The tariff reshuffle tests that balance. A rushed deal with the US that locks India into trade commitments could constrain its flexibility with other partners. A prolonged delay, meanwhile, risks inviting retaliatory Section 301 investigations.

Fortune reported that Trump has warned countries they could face something “far worse” if they attempt to renegotiate existing deals — a reminder that the Section 122 tariff authority, though temporary (it expires in approximately 150 days, around mid-July), could be supplemented by Sections 232 and 301, which carry no such time limit.

The uncertainty, as Moody’s chief economist Mark Zandi told CNBC, has already begun to affect business behavior. “Businesses don’t know what’s going to happen next. They’re going to invest less, they’re going to hire less, they’re going to be less aggressive in their expansions.” That chilling effect applies equally to supply chain decisions across Asia.

The Road Ahead: Three Scenarios

Scenario 1 — Managed De-escalation. Trump’s China visit in late March produces a framework agreement. China adjusts its countermeasures, the US agrees to hold Section 301 rates steady (rather than expanding them), and a 90-day diplomatic truce takes hold. India finalizes its interim deal at a rate near or below 15%. Both countries gain breathing room. Probability: Moderate, contingent on domestic political conditions in Washington.

Scenario 2 — Procedural Escalation. The US uses Section 301 investigations to reconstruct country-specific pressure on China, and Section 232 national security reviews to target Indian steel, pharmaceuticals, and solar exports. The “new 10%” baseline becomes a floor, not a ceiling. India’s interim deal collapses. China digs in ahead of a midterm-election-minded Trump. Probability: Elevated, given the USTR’s stated intention to launch new investigations.

Scenario 3 — Legislative Reset. Congress, under pressure from businesses seeking tariff refunds and legal certainty, passes framework legislation granting the president conditional tariff authority with statutory guardrails. Both China and India face a more institutionally anchored — and therefore more predictable, if not necessarily lower — tariff regime. Timeline: 12–18 months at minimum.

Conclusion: The Numbers Are Not the Story

The Supreme Court’s February 20 ruling is less the end of America’s tariff wars than the end of their most arbitrary phase. As AP reported, the ruling means Trump “can’t conjure up new import taxes on a whim anymore” — but it does not mean tariff confrontation is over.

For Beijing, the ruling is a tactical gift deployed at a strategically opportune moment. For New Delhi, it is an unwelcome complication to a negotiation already dense with sectoral trade-offs and domestic sensitivities. Neither capital is rushing to the table. Both are recalculating.

What is clear is that the era of IEEPA-powered shock tariffs — unilateral, unlimited, and legally contested — has ended. What replaces it will be slower, more institutionally embedded, and therefore harder for trading partners to navigate through simple concession. That is a subtler kind of pressure, but it is pressure nonetheless.

Researchers and policymakers tracking the US-China-India trade triangle should watch three indicators closely over the coming weeks: the outcome of the Trump-Xi summit, whether India’s rescheduled trade delegation reaches Washington before Section 122 authority expires in mid-July, and the pace of new Section 301 investigation filings. The numbers on a tariff schedule are, in the end, just the opening bid. The real negotiation has barely begun.