On February 20, 2026, the U.S. Supreme Court delivered a historic 6-3 decision that essentially dismantled the “Tariff Wall” built by the Trump administration over the past year. In the case of Learning Resources Inc. v. Trump, the Court ruled that the President overstepped his constitutional authority by using the International Emergency Economic Powers Act (IEEPA) to impose broad, sweeping taxes on global imports.
The “Big Three” Legal Blows
The ruling, authored by Chief Justice John Roberts, targeted three specific pillars of the 2025-2026 trade policy:
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The “Liberation Day” Tariffs: The 10% universal baseline tariff (and higher country-specific rates) announced on April 2, 2025, was declared void.
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Fentanyl-Related Levies: Tariffs specifically targeting Canada, Mexico, and China under the guise of drug-trafficking emergencies were struck down.
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Reciprocal Tariffs: The “eye for an eye” trade policy—where the U.S. matched the tariff rates of other nations—was ruled an unconstitutional delegation of Congress’s taxing power.
The $175 Billion Question: The Court has remanded the case to the Court of International Trade to handle refunds. Estimates suggest the government may have to pay back between $160 billion and $200 billion to U.S. importers who paid these “illegal” duties.
The “Double Tax” Removal for Indian Exporters
Before the ruling, Indian goods were facing a brutal “Two-Tranche” tariff regime. The Supreme Court effectively dismantled the legal basis for both:
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Reciprocal Tariffs (The “Liberation Day” Tax): India was recently under a 25% reciprocal tariff, which was in the process of being lowered to 18% under the new trade deal. The Court’s ruling on the IEEPA law makes that 18% rate technically “infructuous” (void) for now.
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The “Russian Oil” Penalty: The 25% secondary tariff imposed on India for purchasing Russian crude had already been waived earlier in February as part of the trade deal.
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The Result: Roughly 55% to 60% of Indian exports to the U.S. now face zero or near-zero reciprocal tariffs, reverting to the standard “Most Favored Nation” (MFN) rates which are significantly lower.
Impact on Indian Stock Market (Nifty & Sectoral)
The Indian markets reacted with immediate “Green” signals. On February 21, the GIFT Nifty climbed over 250 points in response to the news.
Winners: The “Export Engines”
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Nifty Pharma: The pharmaceutical sector is the biggest winner. With the 18% tariff cloud lifted, companies like Sun Pharma, Dr. Reddy’s, and Aurobindo Pharma are expected to see a significant boost in margins. The sector had already jumped 4.5% following the initial trade deal; this ruling provides “legal cement” to those gains.
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Nifty IT: While IT services aren’t directly “tariffed” like physical goods, the ruling removes the macro-uncertainty that was delaying contract renewals from U.S. clients. Stocks like TCS and Infosys benefit from the improved “Bilateral Vibe.”
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Textiles & Engineering: Indian textile exporters (like Page Industries or Welspun) regain a massive competitive edge over Vietnam and Bangladesh, who do not have the same “special relationship” exemption Trump recently mentioned.
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The “Refund” Windfall Indian companies that have been paying these “illegal” duties since April 2025 are now eligible to join the multi-billion dollar refund push in U.S. courts. This could lead to a massive one-time cash infusion for major Indian exporters.
US Stock Market Impact: The “Short-Term Jolt
The equity markets reacted with a “relief rally,” but the gains are complex.
Immediate Winners
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Retail & Consumer Discretionary: Heavy hitters like Walmart, Target, and Home Depot saw an immediate lifting of cost pressures. The removal of IEEPA tariffs is expected to save the average American household roughly $1,000 to $1,300 per year in 2026.
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Tech & Semiconductors: Tech stocks (Nasdaq) jumped over 200 points following the ruling. The “De Minimis” exemption for low-value shipments (like those from Temu or Shein) was technically restored, providing a boost to e-commerce and logistics.
The “Pivot” Uncertainty
The rally was tempered because President Trump immediately announced “Plan B” from the Oval Office. He is moving to re-impose a 10% global tariff using Section 122 of the Trade Act of 1974.
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Constraint: Section 122 is limited to 15% and lasts only 150 days.
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Market Sentiment: This creates a “Stop-Gap” environment. Traders are moving from a “Permanent Tariff” mindset to a “Rolling 150-Day Uncertainty” cycle.
The “Trump Exemption”: India as a Strategic Ally
In his combative press conference following the ruling, President Trump made a statement that is critical for Indian investors:
“Nothing changes [for India]… the India deal is on. Prime Minister Modi is a great man… we made a deal, it is a fair deal.”
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The 10% Global “Plan B” Exemption: While Trump signed an executive order for a new 10% global tariff under Section 122 (valid for 150 days), early reports suggest India may be exempt from this new surcharge because of the existing trade agreement.
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Strategic Leverage: India’s commitment to “pull way back” from Russian oil and “Buy American” (energy and tech) has effectively purchased it a “security pass” through the next phase of the trade war.
Precious Metals: The “Safe Haven” Paradox
Precious metals provided a fascinating intraday study on February 20.
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Gold ($5,000+ Level): Initially, gold prices “pared gains” (slipped slightly) as the immediate threat of a global trade war cooled. However, spot gold quickly resumed its rally, trading around $5,025/oz.
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The Inflation/Growth Mix: The same day as the ruling, U.S. GDP data showed a sharp slowdown to 1.4%, while inflation (Core PCE) remained sticky at 3.0%. This “Stagflationary” hint, combined with the massive $175B refund liability for the U.S. Treasury, makes gold more attractive as a fiscal hedge.
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Silver & Industrial Metals: Silver outperformed gold, jumping 3.4% to $81.02/oz. If tariffs vanish, industrial demand for silver (solar, electronics) is expected to surge, while the metal retains its monetary hedge properties.
- Stronger Rupee: As Indian exports become more competitive and the U.S. Dollar weakens (due to the loss of tariff revenue), the USD/INR pair may cool down. A stronger Rupee typically makes gold cheaper for Indian buyers.
Technical & Astro-Gann Perspectives
For those tracking these markets using Gann-based methodology:
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The “Squaring” of Price & News: The February 20 ruling occurred exactly as markets were testing major long-term resistance levels. The “Time” of this ruling may mark a significant pivot point in the USD cycle.
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Refunding Liquidity: A $175B refund is effectively a massive Quantitative Easing (QE) event. When that money hits corporate balance sheets, it could provide the “Moonshot” fuel for the next leg of the bull market.
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The 150-Day Cycle: With Section 122 now the primary tool, watch the mid-July 2026 window. This is when the temporary “Plan B” tariffs will expire or face a new legal cliff.
Summary Table: Market Outlook Post-Ruling
| Asset Class | Immediate Impact | 6-Month Outlook | Key Driver |
| S&P 500 / Dow | Bullish | Cautiously Optimistic | Lower COGS & Potential Refunds |
| Gold | Neutral/Bullish | Strong Bullish | Fiscal Deficit & Slowing GDP |
| Silver | Bullish | Very Bullish | Industrial Demand Recovery |
| U.S. Dollar | Bearish | Volatile | Loss of “Tariff-Support” |
Summary for Indian Investors
| Factor | Status | Impact on India |
| Tariff Rate | Reverting from 18%-25% to MFN (near 0% for many) | Strong Positive |
| US-India Trade Deal | Trump confirmed it remains “ON” | High Certainty |
| Section 122 (New 10%) | India likely exempt | Competitive Edge |
| Russian Oil | India continuing to pivot toward US Energy | Geopolitical Win |