India Hopes for Relief as US Court Says Trump’s Tariffs Are Not Legal

New Delhi: As top US trade negotiators are set to visit India on June 5 and 6, Indian officials are closely examining the implications of a recent US Court of International Trade ruling that significantly limits former President Donald Trump’s power to impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA).

Court Ruling Undermines Trump’s Global Trade Leverage

In a major legal setback for the Trump administration, the court ruled that IEEPA does not authorize the use of tariffs as a retaliatory trade measure. The court declared that such tariff orders were unlawful and exceeded the President’s legal authority. However, the Trump administration has filed an appeal, prolonging the legal battle and delaying any immediate impact.

India Gains Temporary Flexibility in Ongoing Trade Talks

The ruling provides India a temporary breather and greater leverage in its ongoing trade negotiations with the US. Government officials stated that the long-term foundation of an India-US trade deal remains strong, though concerns remain about potential pressure from Washington to open sensitive sectors such as agriculture and data services.

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Trump’s Tariff Tools Still in Play: Steel, Aluminium Tariffs Unaffected

Despite the court ruling, tariffs imposed under other US laws such as Section 232 (steel and aluminium) and Section 301 remain in effect. Indian exporters will continue facing 25% tariffs on steel, aluminium, and automotive parts, even as India negotiates to avoid the threatened 26% reciprocal tariffs paused until July 8.

Experts Warn of One-Sided Trade Deal Under Trump

Trade analysts have raised red flags about the Trump administration’s aggressive negotiation style, urging India to avoid long-term commitments under pressure. Critics have labeled US trade deals under Trump as “one-sided”, citing the UK-US trade agreement as an example. Many of Trump’s tariff maneuvers have also been challenged for not being WTO-compliant.

US Pressure to Open Indian Market Further

During trade discussions, US negotiators have reportedly pushed India to open politically sensitive areas, particularly agriculture and imports of genetically modified (GM) crops, which India considers critical to food security. India had previously resisted these asks but made some tariff cuts (e.g., on bourbon whiskey and Harley-Davidson motorbikes) to de-escalate tensions.

Push for Regulatory Overhaul in India

The United States has also called for reforms in India’s intellectual property rights (IPR) regime, especially targeting Section 3(d) of the Indian Patents Act, which prevents evergreening of pharmaceutical patents. India, a global supplier of affordable generics, continues to resist pressure from Big Pharma.

Big Tech, Data Localization, and Digital Trade Conflicts

Washington has also lobbied to ease India’s data localization rules and open its digital economy to big tech firms. However, reports by Indian parliamentary committees and the Competition Commission of India (CCI) have criticized platforms like Google for anti-competitive behavior and dominance in app distribution and payments.

What the Court Ruling Means for India

The US court decision means India can now negotiate with more autonomy and less fear of immediate tariff impositions. However, experts caution that Trump’s administration may continue to delay implementation of the ruling through legal appeals, keeping the pressure tactics alive.

Experts Say Legal Loss Was Strategic

International law expert Markus Wagner noted that IEEPA was never a valid basis for tariffs, and the Trump team likely used it as a temporary tool to gain leverage. He warned that even if the ruling stands, its enforcement will be delayed, and the real challenge lies in how other countries—including India—respond to the continued erosion of global trade norms.