The United States announced a 10% global tariff on Tuesday — ending nearly a week of confusion following a major legal setback. President Donald Trump had announced a 15% levy on Saturday following a US Supreme Court verdict that deemed his sweeping reciprocal tariffs illegal. A furious Trump had announced a 10% tax within hours of the verdict and later hiked the figure without releasing any official confirmation. A notice from the US Customs department clarified on Tuesday that goods not covered by exemptions would face a 10% tax rate. 

According to a Reuters report quoting CBP, the notice would “provide guidance” regarding the proclamation issued by Trump on February 20. It made no mention of his subsequent assertions via Truth Social and offered no explanation about the seeming change of heart. The move has added to the global confusion surrounding US trade policy and many hope the POTUS will provide some clarity during the State of the Union address on Tuesday night. 

While immediate windfall will be for the importer who would have to pay 40% less tariffs, some of it may be passed on to Indian exporters.

“Many exporters had an understanding with the buyers while negotiating contracts at very thin margin or even loss that benefit from change in duties would be shared with them too,” CEO and Director General of Federation of Indian Export Organisations (FIEO) Ajay Sahai said.

How much will India pay?

The latest tariffs will come as a relief for some industries while others remain wholly unaffected. Reports indicate around 55% of Indian exports to the US had fallen under the ‘liberation day’ taxes imposed through the International Emergency Economic Powers Act. Levies announced separately on items such as steel, aluminum, copper and auto parts remain unchanged because they do not come under the scrapped IEEPA order. 

The 10% tariff rate would likely put India at a overall rate of around 13.4% when combined with the baseline pre-existing levies. India had faced only the earlier Most Favoured Nation (or MFN) level of 3.4% tariff immediately after the court decision — at least in theory. This figure is a weighted average of everything India sells to the United States since MFN can vary widely by item.

The White House had also shared the details on its website after making 10% announcement on Saturday — calling his proclamation a “temporary import surcharge to address fundamental international payments problems”. A surcharge by definition stacks on top of existing fees and baseline duties rather than being a flat, all-inclusive rate. This implies that the 10% tax will be above and beyond the long-standing levies on Indian goods exported to the US. The 13.5% figure is derived by combining the newly announced 10% tariff with the 3.5% MFN weighted average.

The White House had earlier clarified that the surcharge will not stack on top of Section 232 tariffs on items such as aluminium and steel.

Tariff may be hiked again?

Both The Financial Times and Bloomberg quoted White House officials as saying that an increase up to 15% would come later — but there has been no official update. The Trump administration is reportedly working on a formal order to hike the rate and a timeline for implementation has not been finalised.

The lack of clarity from Washington has spawned confusion around the globe about Trump’s tariff agenda. Countries and corporations are poring over existing trade agreements to determine how they’d fare under Trump’s latest threats. Major trading partners, including the European Union and India, have abruptly halted ongoing trade negotiations amid the uncertainty.