India 50% US tariff, US-India trade dispute: The ruling affects the 25 per cent reciprocal tariffs imposed by the US on India, as well as the additional 25 per cent tariffs imposed on India’s imports of Russian oil, as Trump announced these tariffs under IEEPA.
Days after steep 50 per cent US tariffs on India came into effect, a US appeals court on Friday ruled that a majority of US President Donald Trump’s tariffs derived from powers under the International Emergency Economic Powers Act (IEEPA) are illegal. The court said that the tariffs, however, will continue to remain in place until October 14, giving the Trump administration a window to appeal to the US Supreme Court.
The US Court of Appeals said: “The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution. Tariffs are a core Congressional power.” It added: “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs.”
The ruling affects the 25 per cent reciprocal tariffs imposed by the US on India, as well as the additional 25 per cent tariffs imposed on India’s imports of Russian oil, as Trump announced these tariffs under IEEPA. However, sectoral tariffs such as the 50 per cent duty on steel and aluminium, where Trump has used Section 232 of the Trade Expansion Act of 1962, face no legal challenges.
Why Trump uses IEEPA
Arguing before the Court of International Trade to avoid an adverse ruling, US Secretary of Commerce Howard Lutnick stressed the limitations of other legal tools available to the Trump administration to tackle rising trade deficits, particularly with countries like China.
Lutnick explained that alternatives—such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974—are not designed for national emergencies, are procedurally time-consuming, and do not permit immediate action.
“Under Section 232, the Department of Commerce has up to 270 days to conduct an investigation and submit a report to the President, who then has up to 90 additional days to decide whether to act, and a further 15 days to implement any action. Similarly, under Section 301, the United States Trade Representative must complete an investigation within 12 months, with additional time for enforcement. IEEPA is different—it allows the President to act immediately to protect national interests, provided all conditions under IEEPA are satisfied,” Lutnick told the court
Without this tool, the President’s ability to formulate foreign policy would be severely constrained, and national security would be at risk, he added.
Expect no change in US intent
Markus Wagner, Professor of International and Comparative Law at the University of Wollongong, Australia, had said on social media that IEEPA was “never the right vehicle” and that Trump administration lawyers were likely fully aware that its use would be found unlawful.
“But that was likely never the point—basing US measures on IEEPA bought the Trump administration time. That time isn’t over yet, as it’s safe to predict that the Court of International Trade (CIT) decision will a) be appealed and b) any implementation of the decision, should it stand, will be delayed as much as legally possible,” Wagner said in May after the Court of International Trade ruled against Trump’s tariffs.
The underlying strategies or goals have not changed, he said
“The bigger question is what other countries will do—whether to uphold some of the existing rules or find ways to mitigate the damage the Trump administration has done and will likely continue to do,” the professor noted.
