Tariffs mixed by US court, may bolster India's hand at talks

The US Court of International Trade has declared US President Donald Trump's reciprocal tariffs as illegal, prompting calls from experts in India for New Delhi to reconsider its approach to the ongoing trade negotiations with Washington.

- Dhirendra Kumar

The court ruled on 28 May that Trump's 10% baseline tariffs and country-specific duties—such as the 26% levy on Indian goods—were not justified under the International Emergency Economic Powers Act since trade deficits do not qualify as an "unusual and extraordinary threat" under the law.

Since Trump announced the reciprocal tariffs on 2 April, the US has been pressing other nations into making unilateral concessions to avoid its steep tariffs.

Indian negotiators are preparing to open up sensitive sectors, including automobiles and agriculture, and allow greater foreign access to government procurement and digital infrastructure as part of a bilateral trade agreement with the US.

Experts now say India should hit pause.

"The court has struck down the very basis of Trump's tariffs. India must not enter into a one-sided deal based on illegal pressure tactics," said Ajay Srivastava, co-founder of the Global Trade Research Initiative (GTRI), a trade research think tank.

"We should reassess our strategy, ensure reciprocity, and not rush into finalizing an FTA (free trade agreement) that disproportionately benefits the US," he said.