Indian govt assessing impact of U.S. court decision on Trump tariffs: Sources

The Indian government is assessing the potential impact of a U.S. court’s ruling that said President Donald Trump’s retaliatory tariffs on other countries were “unconstitutional”, according to government sources. 
| Photo Credit: Reuters

The Indian government is assessing the potential impact of a U.S. court’s ruling that said President Donald Trump’s retaliatory tariffs on other countries were “unconstitutional”, according to government sources. 

These sources also confirmed that the U.S. team of negotiators for the ongoing India-U.S. Free Trade Agreement discussions would be in India on June 5-6, and added that negotiations were “progressing well”. The Indian delegation, led by Commerce and Industry Ministry Piyush Goyal, returned from an around week-long trip to the U.S. last weekend. 

‘The Court of International Trade in the U.S. on May 28 ruled that the International Emergency Economic Powers Act of 1977— the legislation under which Mr. Trump imposed his ‘Liberation Day’ retaliatory tariffs— did not confer on the U.S. President the “unbounded authority” to impose unlimited tariffs on nearly all countries in the world. 

As such, the court set aside the tariffs, which were in any case paused by Mr. Trump until July 8. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court noted. “The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders.”

According to trade experts, India must use the opportunity provided by the U.S. court decision to pause and reassess its strategy in the FTA negotiations. 

“India should resist any agreement shaped by threats or based on unlawful measures,” former Director General of Foreign Trade Ajay Srivastava said. “Not only do these Trump-era tariffs violate World Trade Organization rules, but the U.S. court has now confirmed they also breach U.S. domestic law.” 

“With the Trump tariffs standing on shaky legal ground, India must pause and reassess its negotiation strategy before committing to an FTA that could disproportionately favor U.S. interests,” Mr. Srivastava added.