Updates concerning Measures by and against the U.S.
Additional tariffs imposed by the USA challenged before American Courts (28 May)
On 28th May 2025, the Court of International Trade held that the additional tariffs imposed by President Trump were not authorized under the International Emergency Economic Powers Act (IEEPA). The President, on 20th January 2025, imposed additional tariffs on imports from Canada, Mexico and China citing a national emergency due to persistent illegal immigration and narcotics trafficking. The additional tariffs imposed on Canada and Mexico were 25%, while 20% additional tariffs were imposed on China. Further, on 2nd April 2025, the President imposed retaliatory tariffs on 57 countries, including India, stating a trade deficit emergency. The tariffs were rolled out in two stages, (a) 10% baseline tariff applicable on all imports, effective from 5th April 2025; and (b) reciprocal, country-specific tariffs effective from 9th April 2025. However, the Court of International Trade held that such tariffs were outside the scope of legal powers of the President granted under the IEEPA. The Court held that the IEEPA does not authorize retaliatory or globally applied tariffs, and that the President exceeded his statutory authority in imposing such tariffs. Consequently, the Court permanently revoked the tariffs and their enforcement. The Court provided time till 6th June 2025 to implement its Order.
A similar ruling was made by the U.S. District Court for the District of Columbia, on 29th May in a case filed by certain education toy companies which were heavily reliant on imports from China, Vietnam, Taiwan, Thailand, and India.
However, the US Administration challenged the Order of the Court of International Trade before the U.S. Court of Appeals for the Federal Circuit, which issued an immediate stay on the Court of International Trade's decision. Parties are required to respond to the stay motion by 5th June 2025, with the reply from the US Administration due by 9th June. The administration has stated that if the Appeals Court also strikes down the tariffs, it will appeal to the U.S. Supreme Court. Pending the final resolution, the tariff structure for the time being remains intact, with additional tariffs imposed under the IEEPA being enforced.
However, the decision of the Court of International Trade, and the pending decision of the Appeals Court do not apply to the additional Section 232 tariffs imposed on autos and automobile parts, steel and aluminium products. EU, India, Japan and the United Kingdom have separately notified the WTO of proposed suspension of concessions in the form of increased tariffs against USA.
Indian Updates
The Hon'ble Supreme Court stays the decision of Gujarat High Court regarding exclusion of certain grades from the product scope in the matter concerning PVC Suspension Resins (23 May)
The Hon'ble Supreme Court has stayed the Gujarat High Court's Order dated 25th April 2025, which had allowed the exclusion of certain grades of PVC Suspension Resins (“S-PVC”), termed as “speciality grades” by the importer, from the scope of the ongoing anti-dumping investigation. The High Court held that the grades of S-PVC used for manufacturing C-PVC were neither produced by the domestic industry nor the imported grades were substitutable by the grades manufactured by the domestic industry. The High Court also held that judicial interference was warranted in the absence of a statutory appellate remedy against the Preliminary Findings. The Supreme Court granted interim relief in the form of stay on the implementation of the High Court's Order.
Amendment in Import Policy Condition of Cabinet Hinges
The Directorate General of Foreign Trade has amended the import policy for Cabinet Hinges under ITC (HS) Codes 8302 1010, 8302 1090, 8302 4200 and 8302 4900. Imports having a CIF value of less than INR 2280 per kilogram will be ‘Restricted'. Such imports were ‘Free' under the previous policy.
Amendment in Import Policy Condition of Roller Chains and parts
The Directorate General of Foreign Trade has amended the import policy for Roller Chains and parts under ITC (HS) Codes 7315 1100, 7315 1900 and 7315 9000. Imports having a CIF value of less than INR 235 per kilogram will be ‘Restricted'. Such imports were ‘Free' under the previous policy.
Global Updates
Russia initiates WTO dispute regarding EU's Carbon Border Adjustment Mechanism (19 May)
The Russian Federation has requested WTO dispute consultations with the EU and member states concerning its Carbon Border Adjustment Mechanism (CBAM) Package and alleged export subsidies under the EU scheme for trading greenhouse gas emission allowances. Russia claims that carbon border adjustment and emissions trading is inconsistent with the obligations of the EU under various provisions of GATT 1994; the Agreement on Import Licensing Procedures; the Agreement on Subsidies and Countervailing Measures; and the Protocols of WTO Accession of Bulgaria, Croatia, Estonia, Latvia, and Lithuania.
China challenges implementation of China Surtax Order 2024 by Canada (23 May)
On 23rd May 2025, the Dispute Settlement Body heard the delegations of China and Canada on the recent implementation of China Surtax Order 2024 by Canada. The agenda was added to the meeting on the request filed by China for establishment of a panel to examine and analyze the imposition of additional surtaxes.
On 26th August 2024, the Government of Canada announced imposition of 100% surtax on Chinese imports of electric vehicles with effect from 1st October 2024 and 25% on imports of Steel and Aluminium products with effect from 15th October 2024. The decision was based on a 30 days consultation attended by various stakeholders who presented their opinions on the adverse impact of significant subsidies received by Chinese producers of electric vehicles, steel and aluminium products and the idle capacities being diverted to Canadian market. Additionally, consensus was drawn that such activities of Chinese exporters were exploiting the consumers and distorting the fair market conditions of the country.
As a counteract, China filed a request for consultation with Canada claiming that such measures were discriminatory, protectionist and inconsistent with the principle of Most Favoured Nation Treatment under Article 1.1. 2.1(a) and 2.1(b) of GATT. China filed an addendum to its request for consultation to address potential surtaxes planned for imposition on various other products including batteries and parts thereof, semi-conductors, solar products and critical minerals in 2025-26.
A consultation was conducted on 7th April 2025. However, it did not provide any fruitful resolution to the issues raised. Thereafter, China again approached the Dispute Settlement Body seeking an opportunity to present its contentions in the meeting scheduled on 23rd May 2025. The Dispute Settlement Body considered the request filed, heard the submissions of both parties and has agreed to revert on the matter.
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