US: Executive and Judiciary at Odds on Tariffs

The cracks have continued to surface with the situation flaring even more after the unanimous ruling of the the Court of International Trade was de-tropped by President Trump. Criticizing the judgement Trump stated judges as ‘backroom hustlers’ undermining his economic agenda .

What is the Case?

On May 28, 2025, USA’s Court of International Trade in V.O.S. Selections, Inc. v. United States case, filed in April 2025, ruled Trump has exceeded his authority under the International Emergency Economic Powers Act (IEEPA). This was a major setback for the Trump administration as the judgment blocked certain tariffs without Congressional approvals. 

      Considering the legal avenues to sustain its tariff policy, the Trump administration has taken the case in U.S. Court of Appeals for the Federal Circuit. This has managed the executives to take a stay on the lower court’s ruling and keep the tariffs in effect until the appeal is considered.  

Alec Phili, Chief U.S. Political Economist at Goldman Sachs, who holds the specific belief that these tariffs will negatively impact the American economy. After the initial ruling Alec stated the administration in the pursuit of legal backup  methods to uphold the tariffs can utilize Section 122 of Trade Act 1974- empowering the President to impose 15% tariffs for 150 days without requiring Congress. Trump can also look for sector specific tariffs as it has strong legal footing, avoiding widespread disruption.

Tariff Structure Proposed by Trump Administration

How can India benefit from this?

The chaotic situation on the foreign land is very significant for India because of the casket of opportunities it presents. Legal confinement to Trump’s (President’s) power will reduce trade uncertainty and allow Indian exporters ( pharmaceuticals, textiles and software) to compete fairly, eventually increasing India-USA exports. If the Federal Circuit upholds the Court of International Trade’s judgment India will  be in a position to negotiate bilateral or sector-specific trade terms, particularly in electronics, defence components and green-tech. The broader tariff imposition also positions India as a viable sourcing option other than China, with much lesser risk. Giving us an opportunity to become a reliable alternative. Hence probably blostering the India-USA trade.

Amid the current tariff situation multinational companies will be looking at India as a stable manufacturing base, not only bringing foreign direct investment but strengthening domestic production. This perfectly aligns with India's aligns with India’s ‘Make in India’ and Production Linked Incentive (PLI) schemes. USA -India relations can be economically deepen in the given scenario.