His remarks come amid renewed turbulence in US trade policy after the Supreme Court of the United States struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), only for President Trump to quickly announce a fresh 10% tariff under Section 122 of the Trade Act of 1974, later raising it to 15%.
Kumar said the legal footing of the new tariff is “a little bit on shaky ground”, noting that Section 122 is designed primarily to address balance of payments problems. “You need to have a balance of payments problem, and it’s hard to argue that the United States has a balance of payments problem right now,” he said.
However, he pointed out that Section 122 does not require a prior investigation by agencies such as the Commerce Department or the US Trade Representative. The President can impose such tariffs for up to 150 days, which in effect shields them from immediate legal reversal.
“By the time you make a legal case against it and take it to the courts, my sense is the 150 days will be over,” Kumar said, describing the move as a stopgap while the administration considers more durable instruments such as Section 301 or Section 232.
The Supreme Court ruling had briefly raised hopes among businesses that tariffs collected under IEEPA — estimated in reports at around $175 billion — might be refunded. But legal experts say the path to refunds is far from straightforward.
Greg Husisian, Chair of International Trade & National Security Practice at Foley & Lardner LLP, clarified that governments cannot directly claim refunds. “Refunds can only be claimed by the importer of record, which is the company that initially paid the tariffs,” he said. In most cases, that would be a US company, though it could include foreign firms operating as importers.
With more than 1,000 refund lawsuits reportedly filed in the United States Court of International Trade, the process is expected to be lengthy and complex. President Trump has warned that litigation could drag on for years.
For countries negotiating trade arrangements with Washington, the larger concern is predictability. India had agreed in principle to a framework involving an 18% reciprocal tariff, with zero-duty access for certain products on both sides. However, the visit of India’s chief negotiator to Washington has been postponed by mutual agreement.
Kumar said that decision was prudent. “My mantra would be no reneging on the deal that we agreed to in principle, but also no finalisation of the deal until we get some clarification,” he said. He cautioned that India must avoid a scenario in which it signs a deal only to face a Section 301 investigation or fresh sectoral tariffs months later.
“You don’t want a situation where you agree to something with the US and then, three months down the line, face a Section 301 investigation. That is not something India would want,” he added.
Gaurav Ganguly, Head of International Economics at Moody’s Analytics, said the latest developments do inject uncertainty into the global trading system, though not to the extreme levels seen after earlier “Liberation Day” tariff announcements. “Uncertainty is definitely on the rise here, but not to extreme levels,” he said, adding that most countries are now in a “wait-and-see mode”.
He noted that several governments have made ambitious purchase and investment pledges as part of trade discussions with the US. In the current environment, there may be an incentive to slow the ratification of such deals while watching how the balance of power between the US executive, legislature and judiciary evolves.
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Husisian said that even if India proceeds with a framework deal, legal challenges are almost inevitable. “Anything President Trump does on tariffs will be challenged and could potentially go to the Supreme Court,” he said. He expects further use of Section 232 national security tariffs, as well as Section 301 actions to pressure countries without framework agreements.
While the President is likely to maintain broad stability around deals he considers advantageous to the US, targeted tariffs on specific products could still emerge, particularly under national security provisions.
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For India, Kumar’s advice is clear: remain engaged but cautious. New Delhi should continue dialogue with Washington to ensure that any agreement delivers predictability in tariff treatment. “Wait and watch, but stay engaged with the US to ensure that any deal is not reneged upon by either side,” he said.
Until there is clarity on the scope and durability of US tariff authority, he signalled, India would be wise not to lock itself into a binding trade pact that could be overtaken by the next executive action.
Watch accompanying video for entire discussion.
