A coalition of twenty-five Democratic-led US states filed a lawsuit against the Donald Trump administration over latest global tariffs on 60 countries, including India. The US President last month imposed double-digit tariffs on 59 countries including India and the European Union as part of a global crackdown on goods produced using forced labour.. “After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs,” said New York Attorney General Letitia James, as reported by news agency AP.ย
The US federal court earlier struck down the global tariffs imposed by Trump administration. The three-judge panel of the Court of International Trade in New York said the 10 per cent worldwide tariffs were illegal and exceeded the authority granted to the president by Congress.ย ย
The list of states that sued Trump administration are – Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin.ย
Reason behind imposition of double-digit tariffsย
Countries seen as having weak or nonexistent legal safeguards against forced-labour goods, including China and Japan, were placed in the higher 12.5 per cent bracket. Countries that already enforce such bans, maintain partial restrictions, or have formally committed to building comparable frameworks, including India, Sri Lanka, and the EU, qualify for the lower 10 per cent rate.
However, a handful of categories, including goods covered under the US-Mexico-Canada Agreement and oil and gas imports, are exempted entirely from the tariffs. Shipments already in transit before the deadline get a short grace period, with exemptions running until July 28.ย
Why Trump administration imposed lower Tariff rate on India?ย
Trump administration imposed a 10 per cent tariff on imports from India. However, India wasn’t always in the 10 per cent bracket. When USTR first proposed the framework in June, India was initially placed in the higher 12.5 per cent tier. However, that changed after India’s Commerce Ministry amended its Foreign Trade Policy on June 14, restricting imports made through forced or coerced labour, directly addressing the concern at the centre.
India also pushed for the issue to be resolved through bilateral talks rather than unilateral tariffs, and continued diplomatic engagement with Washington through June and July. That combination, the policy change plus sustained outreach, was enough to convince US trade officials to reclassify India before Trump signed off on the new tariff structure on July 23.
The shift saves Indian exporters 2.5 percentage points compared to what was originally proposed, offering some relief for sectors like textiles, pharmaceuticals, engineering goods, and auto components. It also comes right after Washington dropped a separate 25 per cent penalty tariff tied to India’s Russian oil purchases, adding to a recent pattern of easing trade friction between the two countries.ย
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