In April, US President Donald Trump invoked the International Emergency Economic Powers Act (IEEPA) of 1977 to impose tariffs on India and over 180 other countries, framing the move as a matter of national emergency. However, soon after the tariffs were announced, legal challenges arose questioning whether the IEEPA, which had historically been used to freeze assets or impose sanctions on hostile states, could lawfully be stretched to cover tariffs. Faced with mounting judicial scrutiny, the Trump administration quietly pivoted to invoking other trade-related laws such as the Trade Expansion Act of 1962 and the Trade Act of 1974 to justify the tariffs, even while continuing to rely on the IEEPA in official rhetoric. This dual approach has left the administration vulnerable to an ongoing legal battle in a New York court, which could significantly impact Trump’s tariff policies.
The controversy stems from the unprecedented interpretation of the IEEPA. Legal experts have pointed out that the law does not mention tariffs anywhere in its provisions, and no US president before Trump has used it for trade disputes. The case has now escalated to the Federal Circuit Court, where judges have expressed scepticism about the administration’s arguments, with one judge outright noting that “IEEPA doesn’t even mention the word ‘tariffs.’” If the courts ultimately strike down the use of the emergency law, it could undermine Trump’s entire tariff framework, including the duties imposed on India, which now faces some of the steepest reciprocal tariffs at 50%.
India’s case is particularly notable because it has been hit by multiple waves of duties. A 10% baseline tariff was introduced in April, followed by 25% duties in July, and then a further escalation in early August tied to India’s refusal to halt Russian oil imports. Each round of tariffs shifted legal justification, with the administration invoking not just IEEPA but also provisions of the 1962 and 1974 trade laws to shield its measures from judicial invalidation. This shifting legal ground reflects how the administration is attempting to insulate itself from a potential court loss, but also signals the fragility of the tariffs’ legal foundation.
Economists caution that even if Trump’s use of IEEPA is ruled illegal, India might not see immediate relief. They argue that the economic damage from higher tariffs has already been inflicted and cannot easily be undone. Refunds for importers, should the tariffs be struck down, would involve a complex and lengthy process. Moreover, experts stress that India cannot rely solely on a US court ruling for relief; instead, it must work on improving productivity, cost competitiveness, and business ease to withstand global trade pressures irrespective of legal developments in Washington.
The case also carries larger implications for US trade law and presidential power. A ruling against Trump would not only jeopardize the tariffs on India but could also affect duties against dozens of other countries. It would represent a rebuke of Trump’s expansive interpretation of executive power under the 1977 emergency law, setting limits on how presidents can invoke national emergencies to reshape trade policy. On the other hand, if Trump prevails, it would set a precedent granting future presidents sweeping authority to use emergency powers for economic measures far beyond their original scope.
Given the constitutional questions at stake, the case is widely expected to reach the US Supreme Court. The Federal Circuit is moving quickly, and if it issues a decision soon, the Supreme Court could add the case to its docket for the 2025–2026 term. Trump himself has warned of catastrophic consequences should the courts rule against him, predicting economic collapse akin to the Great Depression of 1929. While critics dismiss such rhetoric as political theater, the financial stakes are undeniable: the administration is counting on an estimated $50 billion in revenue from the tariffs, and a loss in court could unravel this source of funding.
For India, the situation highlights the precariousness of relying on shifting US trade policies. Even if courts eventually strike down Trump’s tariffs, the damage to trust and the volatility of bilateral trade relations are likely to persist. Strategic frictions, ranging from oil imports to geopolitical alignments, will continue to shape the trade landscape irrespective of the legal outcome. What remains clear is that the case against Trump’s use of the IEEPA could have significant bearings not only on tariffs against India but also on the broader balance of presidential authority in US trade law.
