US court curbs Trump's tariff power: How it eases pressure on India
Weeks before India and the US were due to sign an interim trade deal to meet the July 8 deadline for reciprocal tariffs, the US Court of International Trade on Wednesday ruled that President Donald Trump does not have the authority to regulate imports into the US through tariffs under the International Emergency Economic Powers Act (IEEPA).
'The court holds, for the foregoing reasons, that IEEPA does not authorise any of the Worldwide, Retaliatory, or Trafficking Tariff Orders. The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders,' the court stated.
Notably, the ruling does not affect tariffs issued by the Trump administration under separate legal provisions, including 25 per cent duty on steel, aluminum and automotive parts where India exporters will continue to face higher tariffs.
The New York Times reported White House spokesman, Kush Desai, stating that : 'It is not for unelected judges to decide how to properly address a national emergency,' and that Trump would use 'every lever of executive power to address this crisis.'
Trump had announced 26 per cent reciprocal tariffs on India and pushed for the opening up of politically sensitive sectors, such as agriculture, during the ongoing trade deal negotiations. However, with the court order casting doubt on Trump's ability to impose unilateral tariffs, India may no longer need to negotiate under the pressure of reciprocal tariffs.
A section of officials in the Ministry of Commerce and Industry had expressed concerns about India's willingness to open up most sectors in order to avoid reciprocal tariffs. New Delhi had already announced several duty cuts—such as on bourbon whiskey and motorbikes—during the Union Budget presentation. The pressure to sign a trade agreement with the US was high as India has agreed to a terms of reference (ToR) that will kickstart trade deal negotiations just before the implementation of reciprocal tariffs on April 2, The Indian Express had reported.
Experts said that with concessions on reciprocal tariffs no longer on the table, India can now seek better market access for its goods from the US under the trade deal, and may also recalibrate its stance on sensitive issues such as data localisation to address domestic concerns.
While Trump had been pushing India to liberalise the movement of data and provide better access for Big Tech companies, a 2018 United Nations Conference on Trade and Development (UNCTAD) report, Power, Platforms, and the Free Trade Delusion, highlighted that access to and control over data has long been a source of 'market power' and can create barriers to entry for new players.
A Standing Committee on Finance report (2022–23) concerning anti-competitive practices by Big Tech firms also observed that Google Play, as the dominant source for downloading apps on Android, mandates the use of its payment system for paid apps and in-app purchases. 'It appears that Google controls a significant volume of payments processed in this market,' the report stated.
The report also said that Google unfairly privileges Google Pay by prominently placing it on the Play Store, Android operating system, and Android-based smartphones, while skewing search results on the Play Store in favour of its payment app. The Competition Commission of India (CCI), in a preliminary order, observed that manipulating such features could act as a potent tool to divert traffic to Google's app, thereby undermining 'competition on the merits'.
According to the United States Trade Representative's (USTR's) Report on Foreign Trade Barriers, the US continues to encourage India to adopt an 'open skies' satellite policy to allow consumers the flexibility to select the satellite capacity provider that best suits their business requirements.
This comes as DOGE chief Elon Musk, a close confidant of President Donald Trump, is a promoter of the Starlink satellite communication service.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
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