What is the common examiner trap about Intl. Relations in UPSC exams?

Confusing 'International Emergency Economic Powers Act (IEEPA)' with 'Omnibus Trade and Competitiveness Act (Super 301)' or 'Section 232 tariffs' (for steel/aluminium). Also, mixing up the new flat tariff rate (15% under Section 122) with the old reciprocal tariff rates (25-50%).

What should UPSC aspirants remember about Intl. Relations for Prelims?

1. Target this Data: India reduced US Treasury holdings by 18.96% ($42.8B) in 2025. 2. Target this Nodal Body: US Supreme Court (SC) struck down tariffs imposed under IEEPA. 3. Target this Legal Point: Section 122 of the US Trade Act of 1974 allows temporary presidential tariffs for ~150 days.

International RelationsEconomy

Take AI Challenge ▸

News 2 of 25

US SC Strikes Down Trump's IEEPA Tariffs; India-US Trade Talks Delayed, RBI Cuts US Treasury Holdings by 18.96%

Q: The US Supreme Court recently struck down tariffs imposed under a specific Act. Which US Act empowers the President to regulate commerce during a declared national emergency?

The International Emergency Economic Powers Act (IEEPA), The article explicitly mentions that the US Supreme Court ruled President Trump overstepped his powers by imposing sweeping tariffs under the International Emergency Economic Powers Act (IEEPA). This 1977 law is used for national security emergencies.

Q: Consider the following statements regarding the recent developments in India-US trade relations: 1. The US Supreme Court upheld President Trump's authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). 2. Following the SC ruling, President Trump imposed a new flat tariff rate of 10% on all imports using Section 122 of the Trade Act of 1974. 3. India's holdings of US Treasury securities increased by over 18% during the calendar year 2025. Which of the statements given above is/are correct?

None of the above, Statement 1 is incorrect: The SC struck down (not upheld) the tariffs imposed under IEEPA. Statement 2 is incorrect: Trump initially imposed 10% but later jacked it up to 15%. Statement 3 is incorrect: India reduced (not increased) its US Treasury holdings by 18.96% in 2025.

Q: According to the article, by what percentage did India reduce its holdings of US Treasury securities in calendar year 2025?

18.96%, The article states: "India's holdings in US securities have come down by $42.8 billion, or 18.96%, from $225.7 billion in January 2025 to $182.9 billion as of December 31, 2025." The other options are close distractors.

Q: What is a primary strategic implication of India reducing its investment in US Treasury securities, as discussed in the article?

To signal a shift towards de-dollarisation and safeguard against potential sanctions., The article links the reduction to global financial uncertainty and the episode where the US blocked Russia's access to its dollar-denominated assets. By diversifying reserves (increasing gold), the RBI aims to reduce over-dependence on one asset class and protect against similar actions, reflecting a de-dollarisation strategy.

Intl. Relations Economy Security & DefenceCORE

Target:UPSC GS-IIMPSCSSC GATeachingBankingPrelims HighMains HighStatic GK Link

23 Feb 2026

~2 min

Source: Indian Express

Key Data:18.96% reduction in US Treasuries$725.72 billion forex reserves$128.46 billion gold reserves15% US tariff rate1.2 GW to 4.8 GW AI data centre capacity

Bodies:US Supreme CourtReserve Bank of India (RBI)US Department of TreasuryGrid India

Practice MCQs from today's news ▸

~2 min · Quick mode

What This Article Covers

1.US Supreme Court's 6-3 ruling struck down President Trump's 'reciprocal tariffs' imposed under IEEPA, deeming them an overreach of emergency powers.

2.India reduces US Treasury holdings by $42.8 billion (18.96%) in 2025, diversifying forex reserves amid trade tensions and global uncertainty.

3.Pakistan conducts strikes in Afghanistan, targeting militant camps, amid rising internal terror attacks and a complex geopolitical profile.

The Big Picture

Prelims · HighMains · High

A landmark US Supreme Court ruling curbs presidential tariff powers under IEEPA, impacting global trade dynamics and India's interim deal. Simultaneously, Pakistan's cross-border strikes highlight regional instability, and India's strategic shift in forex reserves underscores a cautious stance towards US economic policies.

Exam Lens

Quick Exam Facts From News

India's US Treasury Holdings Cut$42.8 billion (18.96%) in CY25

New US Tariff Rate Post-SC Ruling15% flat rate (Section 122, Trade Act 1974)

US Supreme Court Ruling6-3 decision against Trump's IEEPA tariffs

India's Forex Reserves (Feb 2026)$725.72 billion

AI Data Centre Capacity in India (2030 Projection)~4.8 GW (from 1.2 GW)

1-Minute Revision

›India's US Treasury Holdings Cut: $42.8 billion (18.96%) in CY25
›New US Tariff Rate Post-SC Ruling: 15% flat rate (Section 122, Trade Act 1974)
›Target this Data: India reduced US Treasury holdings by 18.96% ($42.8B) in 2025.
›Target this Nodal Body: US Supreme Court (SC) struck down tariffs imposed under IEEPA.
›Target this Legal Point: Section 122 of the US Trade Act of 1974 allows temporary presidential tariffs for ~150 days.

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

News Snapshot

⚖️

Judicial Check on Trade

US Supreme Court curbed presidential power by striking down sweeping tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

📉

India's Forex Strategy Shift

RBI reduced exposure to US Treasuries by over 18% in 2025, increasing gold holdings to $128.46 billion as part of de-dollarisation.

⚔️

Pakistan-Afghanistan Tensions

Pakistan conducted cross-border strikes in Afghanistan's Nangarhar and Paktika regions, alleging targeting of militant camps, raising regional security concerns.

Detailed Analysis & Strategic Depth

Context / Background

The Trump administration used the International Emergency Economic Powers Act (IEEPA) of 1977, designed for national security emergencies, to impose broad 'reciprocal tariffs' on trade partners, including India. This created a framework for unconventional trade deals outside traditional WTO norms, pressuring countries like India into interim agreements offering market access.

Core Analysis & Implications

The SC ruling fundamentally alters US trade policy dynamics. By requiring Congressional approval for broad tariffs, it weakens unilateral executive action. This empowers trading partners to renegotiate deals struck under duress. For India, the 15% flat tariff (under Section 122) is lower than the previous 25-50% rates, potentially levelling the playing field with China temporarily. However, the ruling casts uncertainty over the India-US interim trade deal, which promised 18% tariffs, as its legal foundation is now questioned.

Strategic & Economic Ramifications

India's 18.96% reduction in US Treasury holdings signals a strategic diversification of forex reserves, moving away from dollar dependency amid geopolitical and trade tensions. This aligns with a global trend of de-dollarisation, as seen with China also reducing holdings. The move safeguards against potential US sanctions, as demonstrated during the Russia-Ukraine conflict, and rebalances reserves towards gold and other assets.

Regional Security Dynamics

Pakistan's strikes in Afghanistan, amidst internal terror surges from TTP and Baloch militants, reveal a paradox: rising global relevance through defense deals (e.g., with Saudi Arabia, US investment in Reko Diq) coexists with severe domestic instability. For India, a militarily ascendant Pakistan under Field Marshal Asim Munir poses a traditional security challenge, complicating diplomatic engagements.

Future Outlook / Way Forward

The SC ruling may revive trade multilateralism under the WTO by constraining unilateral measures. India should leverage this to seek better terms in trade negotiations, aligning with its EU FTA strategy. Domestically, the rapid expansion of AI data centres (projected 4x growth by 2030) necessitates urgent grid planning for 'spiky' and variable power loads to ensure energy security for this critical infrastructure.

Key Facts at a Glance

India's US Treasury Holdings Cut$42.8 billion (18.96%) in CY25

New US Tariff Rate Post-SC Ruling15% flat rate (Section 122, Trade Act 1974)

US Supreme Court Ruling6-3 decision against Trump's IEEPA tariffs

India's Forex Reserves (Feb 2026)$725.72 billion

AI Data Centre Capacity in India (2030 Projection)~4.8 GW (from 1.2 GW)

You've read the full analysis. Now test your understanding.

Practice exam-style questions based on this article.

Q1Static LinkageEasyUPSC, SSC

The US Supreme Court recently struck down tariffs imposed under a specific Act. Which US Act empowers the President to regulate commerce during a declared national emergency?

Q2Statement-basedHardUPSC

Consider the following statements regarding the recent developments in India-US trade relations:

1. The US Supreme Court upheld President Trump's authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA).

2. Following the SC ruling, President Trump imposed a new flat tariff rate of 10% on all imports using Section 122 of the Trade Act of 1974.

3. India's holdings of US Treasury securities increased by over 18% during the calendar year 2025.

Which of the statements given above is/are correct?

Q3Data-centricMediumUPSC, Banking, SSC

According to the article, by what percentage did India reduce its holdings of US Treasury securities in calendar year 2025?

Q4Application/ImpactMediumUPSC, Banking

What is a primary strategic implication of India reducing its investment in US Treasury securities, as discussed in the article?

All 25 MCQs ▸

Read original article from Indian Express

You finished this topic

Practice 3 MCQs from this news Next Article

Explore Related Topics

Intl. RelationsView Topic MCQs →EconomyView Topic MCQs →Security & DefenceView Topic MCQs →

PreviousWomen's Reservation Act 2023 Tied to Delimitation; Implementation Delayed Until 2034, Requires Census 2027 Next MHA Releases India's First National Counter Terrorism Policy PRAHAAR 2026, Focuses on Cyber, CBRNED, Drone Threats

Related Current Affairs

Intl. Relations Current Affairs

Trump-Xi Summit Prep: 100% Tariffs on Russian Oil Buyers, $30 bn Reciprocal Tariff Reduction Talks

Top US and Chinese negotiators meet from Sept 19 for final preparatory talks ahead of Trump-Xi summit. Key issues: tariffs, AI, and the new US law imposing 100% tariffs on countries buying Russian oil and gas (including China and India). Simultaneously, both sides are negotiating a reciprocal tariff reduction framework covering $30 billion from each side.

Intl. Relations Current Affairs

SRIA Signed: Jaishankar Conveys India's Energy Concerns Over US Tariffs Up to 100% on Russian Oil

In the first official discussion after Trump signed the Russia Sanctions Bill (SRIA), External Affairs Minister Jaishankar met US Secretary of State Rubio in New York and reiterated India's economic and strategic concerns over potential tariffs up to 100% on Russian oil buyers. India, a major importer of Russian crude, stressed its energy security needs for its 1.4 billion people. The meeting came as both nations work on a bilateral trade deal.

Intl. Relations Current Affairs

Trump-Xi Summit 2026: Xi Warns Against Thucydides Trap, Taiwan Tensions, Trade Truce Extended to Feb 2027

US President Trump and Chinese President Xi held high-stakes talks at the White House. Xi warned against the Thucydides Trap and called for dialogue. No concrete breakthroughs on Taiwan or Iran were reported, but a tariff truce was extended from November 2026 to February 2027. This impacts global trade and geopolitical stability—key for UPSC IR and current affairs.

Intl. Relations Current Affairs

US-China Summit: 2-Month Trade Truce Extension, AI Safety Off Agenda, India Faces Russian Oil Tariff Risk

Trump-Xi summit (Sept 23-24, 2026) resulted in a symbolic but substance-light outcome. AI safety was dropped from talks, a 2-month trade truce extension was agreed, and India faces increased tariff pressure for buying Russian crude oil as China gets a temporary exemption. The summit reinforces India's suspicion that it is the primary US target under the Lindsey O. Graham Sanctioning Russia and Iran Act.

Intl. Relations Current Affairs

US-Iran Tensions: Trump Offers Talks, Oil Prices Slide $4/bbl, OPEC+ Approves 188,000 bpd Production Increase

US President Trump announces talks with Iran, calling off planned strikes, leading to a sharp drop in oil prices. Iran insists the Strait of Hormuz will not return to pre-war status, while OPEC+ approves a production increase of 188,000 bpd from September amid ongoing supply disruptions.

Intl. Relations Current Affairs

US-Iran Talks on Strait of Hormuz Reopening: Oman-Backed Interim Deal Near, India's Energy Security at Stake

US President Trump claims an interim deal with Iran to reopen the Strait of Hormuz is imminent, with Oman and Qatar mediating. Any disruption here directly impacts India's crude oil imports and global energy prices, making this a key IR and energy security topic for exams.

Intl. Relations Current Affairs

Iran President Pezeshkian to Attend 18th BRICS Summit in India; Bilateral Talks on Chabahar and Strait of Hormuz

Iran President Masoud Pezeshkian will visit India for the 18th BRICS Summit (Sept 12-13, 2026), marking his first visit since the Iran-US conflict. Key agenda includes bilateral talks on Chabahar port development and safety of Indian seafarers in the Strait of Hormuz. This is crucial for India's energy security and West Asia diplomacy.

Intl. Relations Current Affairs

US Sanctions 60 Iran-Linked Entities; China-Iran Oil Trade Challenges Trump's Maximum Pressure

The US Treasury's 'Operation Economic Outcast' targets Iran's financial networks, but China's deep trade ties as Iran's top oil buyer complicate enforcement. With a Trump-Xi summit approaching, the US may avoid tough action on China, affecting global oil trade and geopolitics. Critical for understanding US-China rivalry and energy security.

Start Today's Quiz(25 Qs)

Take Today's Quiz

25 Qs • 5-7 Mins

US SC Strikes Down Trump's IEEPA Tariffs; India-US Trade Talks Delayed, RBI Cuts US Treasury Holdings by 18.96%

Exam Lens

Quick Exam Facts From News

1-Minute Revision

News Snapshot

Judicial Check on Trade

India's Forex Strategy Shift

Pakistan-Afghanistan Tensions

Detailed Analysis & Strategic Depth

Context / Background

Core Analysis & Implications

Strategic & Economic Ramifications

Regional Security Dynamics

Future Outlook / Way Forward

Prelims Flashpoints

Key Facts at a Glance