US Court Strikes Down Trump-Era Tariffs Again, India Asked To Reconsider Trade Deal Talks

In a major setback to former US President Donald Trump’s trade policies, the United States Court of International Trade has struck down the 10% global tariffs imposed under Section 122 of the Trade Act of 1974. The ruling, delivered on May 7, comes shortly after the US Supreme Court had already blocked the administration’s earlier “Liberation Day tariffs,” which had imposed duties of up to 50% on several countries.

The court ruled that the Trump administration had exceeded the powers granted under Section 122, stating that the law is intended only for temporary action during serious balance-of-payments emergencies and not for broad tariff measures aimed at reducing trade deficits. The judges described the tariffs as “invalid” and “unauthorized by law.”

The tariffs, introduced on February 20, lasted less than 50 days before being overturned. With both the reciprocal tariffs and the Section 122 duties now facing legal defeats, the United States is effectively reverting to its earlier tariff structure based on Most-Favoured-Nation (MFN) rates under the World Trade Organization framework.

At present, the ruling applies only to the parties directly involved in the case, including the state of Washington, spice importer Burlap & Barrel, and toy company Basic Fun!. Other importers will continue to remain under the tariff system while the US government prepares an appeal before the United States Court of Appeals for the Federal Circuit.

Trade experts believe the legal uncertainty surrounding US tariff policy could have broader global consequences. The Global Trade Research Initiative has advised India to carefully reconsider ongoing Free Trade Agreement negotiations with the United States until Washington establishes a more stable and legally reliable trade framework.

According to the think tank, the repeated cancellation of tariff measures by US courts creates uncertainty for countries negotiating long-term trade agreements. It also warned that the United States is currently unwilling to reduce its own MFN tariffs while expecting countries like India to lower or eliminate duties across major sectors, potentially leading to uneven trade arrangements.

The uncertainty is already influencing international negotiations. Reports suggest that Malaysia has stepped away from a proposed trade agreement with the United States, while several other countries are now reviewing their own trade strategies with Washington amid concerns over policy consistency.