Tariffs as a tool to extort, and slight India's sovereignty
India, Aug. 2 -- US President Donald Trump, in an executive order dated July 31, announced imposing an additional 25% tariff on all Indian imports, on grounds of national emergency and lack of reciprocity. Trump has also said that he would impose an undetermined "penalty" on India for buying oil and weapons from Russia. This latest measure is further evidence of the complete derision with which the Trump administration deals with its partners and with international law. Insulting a partner's economy by calling it "dead", as Trump has done with India, undermines the cardinal principles of mutual respect and sovereign equality that are fundamental to international relations.
It is worth noting that India and the US have been negotiating a bilateral trade agreement since March 2025. Despite the ongoing negotiations, the Trump administration announced reciprocal tariffs on India in April, which were then put on hold, subject to the sides quickly agreeing to an interim trade deal. The two sides have not reached an agreement on an interim trade deal because, reportedly, India is unwilling to open its agricultural and dairy markets. This stance is understandable, as it aims to protect India's politically-sensitive farming sector. The US announcement of a 25% tariff is a blatant attempt to pressure India into agreeing to a trade deal. As per the executive order, this additional tariff will remain until the two sides agree to a trade deal. The US is trying to negotiate while holding a gun to India's head.
These tariffs would hit Indian exports to the US, especially of labour-intensive sectors such as textiles. Additionally, the US imposing an additional 25% tariff on all Indian goods is a blatant violation of international law. It not only breaches the most favoured nation principle laid down in Article I of the General Agreement on Tariffs and Trade (GATT) but also violates the US's bound tariff commitments - a promise not to impose tariffs that exceed the rates mutually agreed upon - under Article II of GATT.
The current situation extends beyond merely imposing high tariff rates. Trump's assertion that India would incur a penalty for purchasing oil and weapons from Russia constitutes a frontal assault on India's sovereignty. It's unclear whether this penalty refers to additional tariffs or something different. Regardless, the threat of such a penalty violates several fundamental canons of international law.
Let us examine this under the law of the World Trade Organization (WTO), of which both India and the US are founding members. Under the WTO law, a member country is not allowed to adopt unilateral trade measures against another member country unless supported by the WTO agreement. A key provision in this regard is that a WTO member country can limit or even forbid trade with another member country on grounds of national security. This principle is codified in Article XXI of GATT, which, inter alia, allows a country to take any actions it deems necessary for protecting its essential security interests during times of war or other emergencies in international relations. This includes measures such as imposing a trade embargo. The WTO panels have interpreted this principle narrowly.
The Russian invasion of Ukraine represents an emergency in international relations. This situation could potentially empower the US to sever its trade ties with Russia. However, the US cannot legally justify restricting trade with countries that engage in commerce with Russia. Imposing additional tariffs on India would be too disconnected from the security threats posed by Russia's aggression in Ukraine to the US, making such an action implausible.
The American penalty threat to India also violates the general international law of non-intervention in a country's sovereign affairs, as laid down by the International Court of Justice in the US v Nicaragua case. From whom to buy oil and weapons is part of India's reserved domain, that is, part of India's sovereign economic and foreign policy. While the US may disapprove of India's policy choices and may seek to influence them through legal measures, it cannot impose unlawful actions - such as tariffs that are WTO-inconsistent - to coerce India into signing a trade deal or to punish it for lawfully trading with Russia. This, as international lawyer Marko Milanovic describes it, can be characterised as coercion-as-extortion, which violates customary international law.
However, viewing the latest actions of Trump merely from the vantage point of international trade would mean missing the woods for the trees. The US, under Trump, appears determined to wage a war with international law and the liberal international order it assiduously built after World War II. The US has traditionally maintained a policy of exceptionalism regarding international law, viewing itself as "distinct" and thus an "exception" to the rules that apply to other countries. However, the Trump administration has escalated this attitude to a whole new level. American professor Mark Pollack has rightly described Trump as a "hostile change agent" in international law who adopts unilateral measures that undermine the international rule of law and topple the law-based order. This is different from many past American presidents who might be characterised as "traditional change agents" trying to persuade others to accept change based on reinterpretation of existing norms or even adoption of new ones. The real worry is that the current hostility to international law might get so entrenched that it would be difficult to reverse it even after Trump leaves office.
Keeping this larger picture in mind, India should stand up against American bullying. While the US is undoubtedly a significant partner for India, New Delhi should send a clear message that it cannot be taken for granted. One effective way to convey this message would be to legally challenge the US's illegal tariffs at the WTO's dispute settlement body. A just and fair rule-based international order is the best antidote to Trumpian unilateralism. India, an essential member of the comity of nations, should take a lead in industriously defending the international rule of law....
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