The US Court of International Trade has ruled that the reciprocal tariffs announced by President Trump on April 2—subsequently suspended, negotiated, and adjusted with select trading partners—are all illegal. The administration now has 10 days to roll back the tariffs already announced. Stock market indices in the US moved up. The world heaved a sigh of relief over this initial sign that the US has not yet deformed into a tinpot dictatorship, in which one man’s will could change the national paradigm wholesale, and that institutional checks and correctives remain in the system. But it would be a mistake to assume that Trump’s tariff tantrums have now become an unpleasant part of history. There are three elements to the logic of the court’s ruling. The reciprocal tariffs were announced under emergency powers derived from the International Emergency Economic Powers Act. The Court found that a case for national emergency had not been established by the Trump administration (IEEPA). It also found that the law, enacted in 1977 to limit and clarify the sweeping powers previously granted to the President under earlier statutes like the Trading with the Enemy Act of 1917—which was used to confiscate property and impose sanctions—contains no specific provisions related to tariffs. Considering the administration’s failure to establish the case for a national emergency, tariff-setting powers stay with Congress, and cannot be delegated to or arbitrarily assumed by the President. Trade Wars Escalate, Diplomacy Stumbles It should be noted, however, that the 25% tariffs levied on steel, aluminium, automobiles and auto-components stay. These tariffs were imposed under a different statute, the Trade Expansion Act. What this means is that the Trump administration—which is already appealing the court order in the Federal Circuit Court in Washington, DC, and could, if necessary, take the case to the Supreme Court—may, if the appeals fail, reimpose the tariffs under a law other than the IEEPA. However, what the current court order, arising from suits brought in by 12 Democrat-run states and some businesses and associations hurt by the tariffs, makes clear is that all tariff orders would be open to legal scrutiny. This is all to the good. Things have been less than smooth for President Trump in other ways as well. His attempt to talk Putin into a ceasefire with Ukraine has been thwarted by Russia, which continues to bomb Ukraine. Germany says Ukraine is now free to use the long-range weapons given to Ukraine without any restriction on how deep into Russia these could hit. This, of course, escalates the conflict. The talks to get a nuclear deal done with Iran are moving at a snail’s pace, if at all; these are going anywhere. Israel, America’s regional partner in the real-estate solution to the Palestine problem, building a Riviera on the Gaza Strip, is getting flak from traditional allies, Britain, France and Germany, for its policy of starving the Palestinian population and bombing them relentlessly. Whatever the diplomatese in which governments wish to couch their description of Israel’s conduct, common people recognise it as ethnic cleansing. The Trump effort to annexe Canada, including by offering to extend to the northern neighbour the Golden Dome of missile interceptors that Trump is building over the US, in case Canada agrees to become the 51st state, has just received a royal rebuff. King Charles of England, whose hospitality Trump hopes to enjoy soon in London, travelled to Canada, whose head of state he also is, for the inauguration of the new Canadian government headed by Mark Carney, and reiterated Canada’s sovereignty, speaking in both English and French. India Invests Abroad, Domestic Gaps Widen Even as India’s official growth numbers for 2024-25 are slated to be announced by the National Statistics Office, market participants have been beguiled by the report that India has become the world’s fourth-largest economy, overtaking Japan in terms of gross domestic output. However, industrial production continues to lag. The Index of Industrial Production grew at 2.7% in April, an eight-month low. The figures for net foreign direct investment (FDI) are even more discouraging. While gross FDI inflows continue to be positive, existing FDI is leaving the country via disinvestment and repatriation. Further, Indian industry is choosing to invest massively abroad, even as it continues to hesitate on domestic investment. Gross FDI inflows grew almost to $81 billion, rising by a smart 14%. But repatriation grew by 16% to $51.5 billion. Outward direct investment by Indian entities jumped 75% to $29 billion. That left net FDI inflows at $0.35 billion, a decline of 96%. One fallout of Operation Sindoor has been to highlight the importance of defence production, and the opportunity that has opened up to not just step up existing lines of defence production in India, but also to develop new technological capability for...