The global trade battle led by former US President Donald Trump has taken a significant turn. A US appeals court has declared that most tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful. This ruling could reshape America’s trade relations, directly affecting countries like India that have been impacted by Trump’s aggressive tariff policies.
The judgment provides temporary relief but leaves space for further legal action. Tariffs will remain valid until October 14, giving the Trump administration time to appeal in the Supreme Court. For India, this decision brings a glimmer of hope against steep 50% import duties imposed on specific goods.
Court Ruling Against Trump’s Tariff Authority
The US appeals court emphasized that the power to levy taxes and tariffs rests primarily with Congress. According to the Constitution, imposing tariffs is a core legislative authority. The court clarified that Congress never intended to grant the President unlimited tariff powers under the IEEPA framework.
The judges highlighted that while the President can act swiftly during emergencies, using IEEPA to impose widespread tariffs without congressional oversight violates the balance of powers. This legal interpretation has created uncertainty for Trump’s trade measures introduced over the past years.
Implications for India
India has faced several layers of US tariffs in recent years. Among them, retaliatory duties and additional charges on oil imports from Russia were particularly significant. The new ruling directly affects the 25% retaliatory tariff and the additional 25% duty on Russian oil imports, both of which may now be reconsidered.
However, the 50% tariff on steel and aluminum imports, imposed under Section 232 of the Trade Expansion Act of 1962, remains unaffected by the decision. This means that while India may gain partial relief, the heaviest duties still continue.
Indian businesses that export steel, aluminum, and manufactured goods to the US will still face hurdles. But for sectors hit by retaliatory tariffs, the ruling may bring a degree of relief once enforcement is adjusted.
Legal Battles Leading to the Decision
The ruling was the result of two lawsuits filed in April by small business groups and a coalition of US states. They challenged Trump’s executive orders that imposed broad tariffs under IEEPA.
Earlier in May, the Court of International Trade (CIT) also declared these tariffs illegal. However, implementation was delayed due to pending appeals. The appeals court ruling now strengthens the argument that Trump overstepped his authority.
Still, by allowing tariffs to remain until October 14, the court has given the administration time to appeal to the Supreme Court. This legal battle is likely to continue for months, prolonging uncertainty in global trade relations.
Why Trump Relied on IEEPA
US Commerce Secretary Howard Lutnick argued in court that Trump had limited legal options. Section 232 of the Trade Expansion Act requires investigations and reports that can take nearly a year. Section 301 of the Trade Act of 1974 involves lengthy and complex processes of investigation and enforcement.
In contrast, IEEPA allows immediate action if national security and interests are at risk. According to Lutnick, without IEEPA, the President’s ability to safeguard foreign policy and national security would be severely restricted.
This reasoning was central to Trump’s defense. His administration argued that in an unpredictable global environment, quick action was necessary. However, the court rejected the idea that urgency justified bypassing Congress.
Strategy or Delay? Experts Weigh In
International law expert Marcus Wagner believes that Trump’s administration always knew IEEPA tariffs were on shaky ground. He said that the strategy was not about legal validity but about buying time.
According to Wagner, the administration used IEEPA as a temporary shield. Even if courts struck it down later, the tariffs would remain in place long enough to serve their purpose. He noted that the strategy has not ended, as further appeals could continue delaying enforcement.
The key question now is not whether America will maintain its trade strategy but how other countries will react. Wagner suggests that nations must decide whether to hold on to existing trade policies or find new ways to counter US measures.
Impact on Global Trade Relations
The ruling highlights the tension between executive power and legislative authority in the United States. It also underscores the uncertainty faced by global markets when unilateral decisions are challenged in court.
For India, the decision offers hope that some trade restrictions may be lifted. However, since Section 232 tariffs remain intact, steel and aluminum exports will continue to face high barriers.
For other countries, particularly those heavily reliant on exports to the US, the ruling serves as a reminder that Trump’s aggressive tariff policies may not survive legal scrutiny in the long run.
Political Fallout in the United States
Domestically, the ruling is a blow to Trump’s claim of strong executive authority in trade policy. Critics have long argued that his tariffs hurt American businesses and consumers. Small companies that rely on imports were among those who challenged the measures in court.
For the Biden administration, which has had to navigate Trump’s legacy tariffs, the ruling provides an opportunity to reconsider trade strategies. However, political dynamics in Washington will determine whether any significant changes are implemented.
Section 232 Tariffs: Still Intact
While the ruling weakens IEEPA-based tariffs, Section 232 tariffs remain legally enforceable. Trump used Section 232 to justify a 50% tariff on steel and aluminum, citing national security concerns.
These tariffs were never part of the IEEPA challenge and remain unaffected. For India and other exporters, this means that a large share of trade restrictions continue to apply.
Commerce Secretary Lutnick defended Section 232 tariffs, claiming they protect American industries from foreign competition. Critics, however, argue that they have increased costs for US manufacturers and strained relations with allies.
The Road Ahead for India
India’s strategy now involves careful navigation of US trade policies. While the appeals court ruling creates room for negotiation, the continuation of Section 232 tariffs means that major trade irritants remain.
Indian officials may push for tariff relief through diplomatic channels, highlighting the economic impact on both sides. Businesses hope that the shifting legal landscape in the US could eventually lead to softer measures.
India’s long-term approach may also involve diversifying export markets to reduce dependence on the US. However, given America’s importance as a trade partner, complete decoupling remains unlikely.
The US appeals court ruling against tariffs imposed under IEEPA marks a major moment in the ongoing Trump tariff war. While it offers hope for countries like India facing retaliatory tariffs, it does not resolve all challenges. Section 232 duties on steel and aluminum remain untouched, continuing to burden exporters.
For Donald Trump, the ruling represents a judicial rejection of his aggressive use of emergency powers. For India and other trading nations, it opens a temporary window for relief and negotiation.
The coming months will reveal whether the Supreme Court upholds or overturns the appeals court decision. Until then, global trade partners remain caught between uncertainty and cautious optimism.
