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Indian Express
a day ago
- Business
- Indian Express
India gets breather ahead of trade talks with US; Pakistan's shift to crypto raises concerns; foreign students in US under duress
US court rulings on Trump's tariffs give India some breathing space; Pak's pivot to crypto raises concerns over possible misuse of the digital currency to fund terror; foreign students face uncertainty amid crackdowns on US varsities; Gaza's entire population faces catastrophic hunger as Hamas reviews US proposal for a 60-day ceasefire; Trump says he told Israel to hold off on any strike against Iran, and Russia, Ukraine to hold second direct peace talks – here is weekly roundup of global news. As India braces to finalise a trade agreement with the US trade negotiators scheduled to arrive here for talks on June 5 and 6, two court rulings this week against Donald Trump's sweeping 'Liberation Day' tariffs added a twist to the bilateral trade negotiations. On Wednesday, the US Court of International Trade deemed Trump's sweeping tariffs illegal, determining that he overstepped his authority by invoking the 1977 International Emergency Economic Powers Act (IEEPA) to impose these tariffs on goods imported into America from almost every nation. A day later, an appeals court – the Federal Circuit Court in Washington, DC that has jurisdiction over the trade court – temporarily halted the decision, which means the levies are back for now and the case will probably end up in the Supreme Court. However, the Trump administration has also slapped other sector-specific tariffs such as on steel, aluminium, cars and car parts under a different statute known as Section 232. There are chances that provisions such as Section 232 would now be used to impose such sector-specific tariffs on countries, especially if the Federal Circuit Court were to also rule against the IEEPA levies. But until the final word on the matter, India has some breathing room in its ongoing trade talks, particularly with the US's demand seeking access to several sectors that traditionally enjoy high protection, such as agriculture, automobiles, and alcoholic beverages. Amid concerns over the impact of trade deals with foreign countries on India's agricultural export, import and the surplus, especially with the US and EU seeking greater market access for their agricultural products, data highlights significant trends. India's agriculture exports increased from $43.3 billion in 2013-14 to $51.9 billion in 2024-25. Meanwhile, imports have shown steadier expansion from $15.5 billion in 2013-14 to an all-time high of $38.5 billion in 2024-25, working out to 148%. In the meantime, India's goods exports worth at least $775 million to the UK continue to face the risk of higher duties under its Carbon Border Adjustment Mechanism (CBAM), despite the conclusion of a Free Trade Agreement (FTA) earlier this month. UK's CBAM was not part of the FTA, but it will initially target carbon-intensive products such as iron, steel, aluminium, fertilisers, hydrogen, ceramics, glass and cement, with scope to expand the list in future. That apart, a dramatic element in the unfolding tariff saga was the claim by the Trump administration that the President averted a full-scale war and brokered a ceasefire between India and Pakistan by offering both nations trading access with the US – a claim categorically denied by India. The simultaneous revelation of an agreement that Pakistan inked with World Liberty Financial Inc (WLFI), a crypto firm majority-owned by Trump and his family, prompted experts like C Raja Mohan to ask India to reflect on its crypto strategy. The shady deal has raised concerns on various fronts, such as: — As of May 6, when India launched Operation Sindoor in response to the April 22 Pahalgam terror attack, the WLFI was sitting on a Senate panel's request, seeking details of its dealings with Pakistan Prime Minister Shehbaz Sharif. — Trump's dual role, as WLFI promoter and the self-proclaimed political broker (in the recent India-Pakistan military conflict), has raised concerns over conflict of interest. — Although the details of the agreement are yet to emerge, it includes grand plans to use blockchain technology to boost financial inclusion and facilitate remittances for cash-strapped Pakistan, with Bilal bin Saqib, the head of the Pakistan Crypto Council, calling his country and Bitcoin as 'victims of bad PR'. — As Pakistan turns to cryptocurrency to solve its economic challenges, India is advised to pay close attention amid concerns over the 'possible misuse of these digital currencies not controlled by any central bank to fund terror and launder money across borders'. All the while, India's multiple delegations are fanning out to carry its anti-terror message worldwide. On Sunday, a team led by senior Congress leader Shashi Tharoor reached the US, where he underlined the need for a 'new normal' in the face of the Pahalgam terror attack. Another team, led by BJP MP Baijayant Panda, arrived in Kuwait, while the delegation led by Sanjay Jha engaged with the Indian diaspora in South Korea. However, as the Indian delegation landed in the US, concerns were growing over the Trump administration's hardline immigration stance. Over 3,31,000 Indian students studying in the US are caught in the crosshairs as the Trump administration targeted universities. This week, it directed federal agencies to terminate an estimated $100 million worth of remaining contracts with Harvard by June 6, as part of its broader efforts to reform institutions like Harvard and Columbia. Foreign students, including Indians, enrolled at Harvard are under duress amid the unfolding crisis as the federal Joint Task Force to Combat Antisemitism warned that if Harvard wishes to continue receiving federal support, it must 'commit to meaningful change'. The university has filed a lawsuit challenging the funding freeze and a related move to revoke its ability to enrol foreign students. A diplomatic cable issued on Tuesday added to the pressure in which the State Department asked its embassies and consular sections to halt new interviews, which began earlier this month, as it weighs requiring all students to undergo social media vetting as part of their application process. This move comes despite the visa application (DS-160) already requiring applicants to disclose their social media platform and identifiers. The US Embassy in India also issued a warning to Indian students studying in the US: 'If you drop out, skip classes, or leave your program of study without informing your school, your student visa may be revoked, and you may lose eligibility for future US visas.' The situation has unsettled international students, who contribute nearly $43.8 billion annually to the US economy, according to NAFSA. These students are often top performers in science, technology, engineering, and mathematics (STEM) fields. Hence, the pause, if implemented, will be a significant blow to US universities, whose annual international student intake hovers around the 1 million mark (1.12 million in the 2023-24 academic year). The ongoing crackdown has begun as a campaign pitch to 'reform' elite universities, including Harvard and Columbia, and has now expanded its scope. The US administration is planning to cancel all remaining contracts with Harvard University, worth about $100 million, while finding 'alternative vendors' for future services. Contracts with around nine federal agencies would be affected, which would also affect researchers at some of India's leading medical colleges and scientific institutions. In April, the federal government froze more than $2 billion in grants and contracts with Harvard, citing non-compliance with requests to modify hiring and admissions policies, dismantle diversity-equity-inclusion (DEI) programmes, and conduct ideological vetting of international students. Harvard has filed a lawsuit challenging both the funding freeze and the move to revoke its ability to enrol foreign students. These developments in the US come amid growing global instability, including in Gaza, which the UN has described as the 'hungriest place on Earth'. The war-riven enclave's 2.3 million people are facing 'catastrophic hunger', as Hamas is reviewing a new ceasefire proposal. As the UN and European countries mounted pressure on Israel to end the war and its 11-week-long blockade on Gaza, a limited amount of aid began entering the besieged enclave under the control of a new NGO backed by Israel and the US – the Gaza Humanitarian Foundation (GHF). However, 20 people were shot by Israeli troops at a GHF aid distribution point on Friday as they desperately tried to get food, Al Jazeera reported, citing sources at Gaza hospitals. While Arab states rejected the new aid system as illegal, the UN and international aid groups also refused to work with the GHF, saying, according to Reuters, it is not neutral and has a distribution model that forces the displacement of Palestinians. Meanwhile, Hamas is reviewing a US proposal for a 60-day ceasefire that has reportedly been accepted by Israel. According to Reuters, the ceasefire would see humanitarian aid delivered by the UN, the Red Crescent and other agreed channels; and the release of 28 Israeli hostages – alive and dead – in exchange for the release of 1,236 Palestinian prisoners and the remains of 180 dead Palestinians. Despite these efforts, hope for peace for the Palestinians remains elusive as Israel blocked a planned meeting of Arab ministers in the Palestinian administrative capital of Ramallah in the occupied West Bank. Reuters cited an Israeli official as saying that the 'provocative meeting' intended to discuss the establishment of a Palestinian state and that 'such a state would undoubtedly become a terrorist state in the heart of the land of Israel'. The move comes ahead of an international conference, co-chaired by France and Saudi Arabia, due to be held in New York on June 17-20 to discuss the issue of Palestinian statehood. French President Emmanuel Macron said on Friday that recognising a Palestinian state was not only a 'moral duty but a political necessity'. After several rounds of Iran nuclear talks, US President Trump this week said that he told Israel to hold off on any strike against Tehran as it 'would be inappropriate to do right now because we're very close to a solution'. 'I want it (nuclear agreement) very strong where we can go in with inspectors, we can take whatever we want, we can blow up whatever we want, but nobody getting killed. We can blow up a lab, but nobody is gonna be in a lab, as opposed to everybody being in the lab and blowing it up,' Trump told reporters on Wednesday at the White House. However, Iran retaliated in equal measure, warning that Trump's threat to destroy its nuclear facilities is a clear red line and will have severe consequences, the semi-official Fars News Agency reported on Friday. The Islamic Republic said that 'if the US seeks a diplomatic solution, it must abandon the language of threats and sanctions', adding that such threats 'are open hostility against Iran's national interests', Reuters reported, citing an unnamed Iranian official. Israel has been threatening a bombardment of Iranian nuclear facilities. According to a Reuters report, which cited Gulf sources, Saudi Arabia's defence minister, Prince Khalid bin Salman, visited Tehran in April and delivered a blunt message to Iranian officials: take Trump's offer to negotiate a nuclear agreement seriously because it presents a way to avoid the risk of war with Israel. Iran and the US have held five rounds of nuclear talks in Oman and Italy, with the last round being described by Iran's Foreign Minister Abbas Araghchi as 'one of the most professional rounds of negotiations' yet. Days after the first direct talks between Russia and Ukraine failed to yield a ceasefire, the two sides will resume direct peace talks in Istanbul on Monday, but Kyiv insisted that Moscow provide a promised memorandum on ending the more than three-year war before they sit down to negotiate. Questioning Russia's commitment to peace, Ukrainian President Volodymyr Zelenskyy said, 'For a meeting to be meaningful, its agenda must be clear, and the negotiations must be properly prepared.' 'Unfortunately, Russia is doing everything it can to ensure that the next potential meeting brings no results,' he wrote on X on Friday after hosting Turkey's foreign minister for talks in Kyiv. Russia's Foreign Minister Sergei Lavrov on Wednesday publicly invited Ukraine to hold direct negotiations with Moscow. In a video statement, Lavrov said Russia would use Monday's meeting to deliver an outline of Moscow's position on 'reliably overcoming' what it calls the root causes of the war, The Associated Press reported. Russia and Ukraine held their first direct peace talks in three years in Istanbul on May 16, which resulted in no significant breakthrough except an agreement on the largest prisoner exchange of the war. It was carried out last weekend and freed 1,000 captives on each side. Why has a crypto agreement between Pakistan and World Liberty Financial Inc (WLFI), a firm majority-owned by Donald Trump and his family, has alarmed India? Evaluate. Comment on India's diplomatic push post-Pahalgam attack, with delegations spanning different countries world over to shape narratives on terrorism. How could the ongoing US crackdown on universities and student visas affect its global standing as a destination for higher education? In what ways might India need to recalibrate its student and research diplomacy with the US in light of these emerging restrictions? Why did the UN and other international aid groups refuse to cooperate with the Gaza Humanitarian Foundation (GHF) backed by the US and Israel? Does the GHF's distribution model conflict with international humanitarian principles? Send your feedback and ideas to
Indian Express
2 days ago
- Business
- Indian Express
The pause on tariffs, and now a stay: where does this leave Trump's disruptive trade agenda
Hours after US President Donald Trump's sweeping tariffs on goods imported into America from almost every nation was ruled illegal by the US Court of International Trade, an appeals court – the Federal Circuit Court in Washington, DC that has jurisdiction over the trade court – on Thursday temporarily halted the decision, reinstating the levies for now. Its order said that it would grant the Trump administration's request for an immediate administrative stay, and gave the plaintiffs — a group of 12 states and five US-based companies — until June 5 to respond to the administration. Judicial Process As the Trump administration's appeal works its way through the American courts, what is clear is that this case will probably end up at the US Supreme Court at some point in the near future. The three judge panel at the US Court of International Trade, which included one Trump appointee, had ruled unanimously that the statute the White House used, known as the International Emergency Economic Powers Act or IEEPA – does not grant the American President the authority to impose tariffs with a really wide scope as were levied through Trump's reciprocal tariffs on practically all major trading partners of the US. They said in the ruling that the emergency economic powers legislation (IEEPA) does not give 'unbounded tariff authority' to the President, and that the statute can only be used for unusual and extraordinary threats. Trade deficit, they said, does not really fit that definition. At the same time, there are sector specific tariffs that the Trump administration slapped on steel, aluminum, cars and car parts etc, under a different statute known as Section 232, which could be used in the near future for things such as semiconductors and pharmaceuticals too. Those were all imposed citing national security reasons, and were distinct from the tariffs under IEEPA. Those can all stay in place for the moment, and there is a chance that the Trump administration would now use provisions such as Section 232 to impose such sector-specific tariffs on countries, especially if the Federal Circuit court were to also rule against the IEEPA levies. What needs to be kept in mind is that apart from this case at the International Trade Court filed by the dozen other states and some small businesses, there is another high-profile case in California from the Democrat Governor Gavin Newsom arguing that Trump's trade tariffs were illegal. This, according to legal experts, is the case to watch out for. Ensuing Uncertainty In the meantime, what is unclear is whether business should ultimately plan for relief if the trade court's ruling stands, or whether the tariffs might stick. That raises the real question about whether the so-called reciprocal tariffs due in July will ever come into effect, whether the 10 per cent universal tariff can stay, whether the US Congress will come to the president's rescue, and what the final judgement of the Supreme Court will be. This course will decide whether nations need to negotiate for deals with the US. And during the appeals process, the Trump administration could seek alternate routes to deploy additional tariffs, according to experts. This could add to the uncertainties. The earlier ruling halting the imposition of the levies serves to undermine ongoing attempts by the US Treasury Secretary Scott Bessent to negotiate trade deals with other countries, including India. The UK is looking somewhat imprudent in having already rushed into a trade deal with the US, which retains the 10 per cent base rate that was part of Trump's original plan. This is despite the US have a trade surplus with the UK. Others such as Japan and the European Union were already holding back, after seeing the Trump administration beat a retreat amid an upheaval in the US government borrowing rates. The legal uncertainty is a further reason for countries to wait and watch. With negotiators from the US set to arrive in New Delhi for trade talks on June 5-6, officials in the Ministry of Commerce and Industry said they are 'studying the implications' of the US Court of International Trade's Wednesday ruling. Trump had on April 2 announced a steep 26 per cent reciprocal tariff on India, despite New Delhi agreeing to commence negotiations with Washington on a trade deal. The tariffs were paused till July 8, and the Indian government is keen to sign an interim trade deal before that. The legal developments, though, could warrant a recalibration now. Legal experts are of the view that the Trump administration could have a weak case, especially when it comes to the question of law on IEEPA. Constitutionally, in America, trade policy is the domain of the US Congress and the chairs of the Trade committees of the House and Senate (branches of the Ways and Means Committee) are typically very powerful positions. President Trump bypassed all of that by proclaiming a variety of national emergencies. While he has some scope to act in actual emergencies, under powers ceded by the US COngress to the White House over the decades, these two specific cases contend that the sweeping use of these powers to announce permanent tariff changes was illegal and unconstitutional. That could hold water. The Court of International Trade ruling appears rather robust from that perspective, and also emboldens California's similar case. For now, it would be prudent to expect other negotiators around the world to put their feet up and wait, while the White House tries to prove the legality of the very basis of its global trade onslaught. Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More
