Legal challenges cloud Trump’s tariff powers as India faces 50% levy

“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 seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the US Court of Appeals said.

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 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.

Trump, in his post on Truth Social, said: “Today a highly partisan appeals court incorrectly said that our tariffs should be removed, but they know the US will win in the end. If these tariffs ever went away, it would be a total disaster for the country. It would make us financially weak, and we have to be strong.”

“We should all remember that tariffs are the best tool to help our workers, and support companies that produce great made-in-America products. For many years, tariffs were allowed to be used against us by our uncaring and unwise politicians. Now, with the help of the United States Supreme Court, we will use them to the benefit of our nation, and make America rich, strong, and powerful again,” he said.

The ruling came in response to two lawsuits filed by small businesses and a coalition of US states after Trump’s executive orders in April. In May, the Court of International Trade had also declared the tariffs unlawful. That decision was put on hold during the appeal process.

Why Trump uses IEEPA

Arguing before another court in May, US Secretary of Commerce Howard Lutnick had stressed the limitations of other legal tools available to the Trump administration to tackle rising trade deficits, particularly with countries like China.

Lutnick explained to the Court of International Trade 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.

Explained

Imperative to talk, negotiate

‘US court battle will shape the future of world trade’

New Delhi-based think tank Global Trade Research Initiative (GTRI) said the US Supreme Court will decide whether tariffs will remain a matter of congressional lawmaking or an instrument of presidential geopolitics.

At the centre is Trump’s reliance on IEEPA, a 1977 law crafted for sanctions and financial controls in times of foreign emergencies, GTRI said, adding that the statute grants presidents broad powers to regulate transactions and block property, but it does not mention tariffs or taxation.

Trump invoked it in 2019 and again in 2025, declaring the US trade deficit and alleged fentanyl inflows from China, Canada, and Mexico as national emergencies to justify sweeping duties. The appeals court rejected this, stressing that Congress—not the President—holds tariff authority, and that any delegation must be explicit and narrow. Multiple lawsuits from states and businesses reinforced this constitutional challenge.

“By declaring a trade deficit a ‘national emergency’ in April and linking fentanyl inflows to tariffs on China, Canada, and Mexico in February, Trump sought to stretch IEEPA beyond its intended scope. The court rejected this interpretation, warning that Congress never intended to grant presidents unlimited tariff powers. Multiple lawsuits—from states and small businesses—reinforced this constitutional challenge. Thus, beyond tariff relief, the ruling reasserts the principle that executive emergency powers cannot override Congress’s core trade and taxation authority,” GTRI said.

Expect no change in US intent

Markus Wagner, Professor of International and Comparative Law at the University of Wollongong, Australia, 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 said.