US Trade Uncertainty Grows as Trump’s Tariff Battles Cast Doubt on India Deal

Political and legal turbulence in Washington is raising fresh questions about the stability of American trade policy — and casting a shadow over the emerging US-India trade framework.

A rare bipartisan rebuke in the US House of Representatives has challenged President Donald Trump’s use of emergency powers to impose tariffs on Canada. The House voted 219–211 to terminate the president’s declaration of a “national emergency” that enabled punitive duties on Canadian goods. Notably, six Republicans joined Democrats in supporting the move, signaling growing unease even within the president’s party.

Although largely symbolic — given Trump’s executive authority — the vote carries political weight. The Senate has already voted twice to block the Canada tariffs, reflecting broader concerns in Congress about the administration’s reliance on the International Emergency Economic Powers Act (IEEPA) to pursue trade actions traditionally overseen by lawmakers.

Supreme Court Decision Looms

The issue is now before the US Supreme Court, which is reviewing the legality of tariffs imposed under emergency provisions. During oral arguments, justices from across the ideological spectrum reportedly questioned whether issues such as trade imbalances or fentanyl flows constitute a “national emergency” warranting unilateral tariff action.

A ruling, expected soon, could have sweeping consequences. If the Court strikes down the measures, the federal government may face billions of dollars in tariff refunds to importers — potentially between $150 and $200 billion — creating both fiscal and political fallout.

Canada Tensions Resurface

The legal battle coincides with renewed friction between Washington and Ottawa. President Trump recently criticized the $4.6 billion Gordie Howe International Bridge project connecting Detroit and Windsor, alleging unfair practices and demanding partial US ownership. Canadian officials rejected the claims, stating that both American and Canadian materials and labor were involved in the project.

The episode has reinforced concerns among US allies that even established agreements may be subject to sudden revision. Despite previously praising the United States-Mexico-Canada Agreement (USMCA) as a landmark achievement, the administration imposed steel and aluminum tariffs on Canada and Mexico under national security grounds after signing the pact.

A similar pattern emerged with South Korea, where a renegotiated trade deal was followed by fresh tariffs citing procedural issues, despite Seoul’s substantial investment commitments in the United States.

Implications for India

Against this backdrop, attention has turned to the recently announced US-India trade framework. Initially presented as a major breakthrough — including references to tariff reductions and large-scale American exports — portions of the White House statement were revised within hours following clarification from Indian officials.

Language regarding specific tariff cuts and purchase commitments was softened or removed, highlighting potential gaps between announcement and negotiated understanding.

For Indian policymakers, these developments underscore a broader concern: the unpredictability of American trade policy under the current administration. If long-standing partners like Canada and South Korea face abrupt tariff actions despite formal agreements, New Delhi may question the long-term reliability of any new arrangement.

India is concurrently advancing trade negotiations with the United Kingdom and the European Union, partnerships often viewed as more procedurally stable.

A Climate of Uncertainty

Trade agreements rely not only on economic concessions but also on institutional trust and policy consistency. With Congress challenging executive authority, the Supreme Court weighing constitutional limits, and shifting positions in public trade statements, the US trade environment appears fluid.

For India, the evolving situation serves as a reminder that even formal agreements may not guarantee stability in the current geopolitical and legal climate in Washington.