India rejects US trade claim to halt conflict after NY court junks Trump’s ‘ceasefire’ case

New Delhi: India on Thursday dismissed claims that trade was discussed with the US during the military standoff with Pakistan, contradicting Washington’s repeated assertions that its trade offers helped defuse the tensions.

New Delhi’s renewed stance follows US Commerce Secretary Howard Lutnick’s statement in a New York court that India and Pakistan agreed to a “tenuous ceasefire” only after President Donald Trump offered both countries access to US markets to prevent a “full-scale war.”

In recent weeks, Trump has also repeatedly claimed he warned both nations that the US would halt trade with them if they failed to de-escalate the conflict.

India has been consistently maintaining that the understanding on cessation of hostilities with Pakistan was reached following direct talks between the Directors General of Military Operations (DGMOs) of the two militaries.

“From the time Operation Sindoor commenced on May 7 till the understanding on cessation of firing and military action was reached on May 10, there were conversations between Indian and the US leaders on the evolving military situation,” External Affairs Ministry spokesperson Randhir Jaiswal said.

“The issue of trade or tariff did not come up in any of those discussions,” he said at his weekly media briefing.

Jaiswal was answering questions on the Trump administration’s submission at the New York court.

“The external affairs minister has also made it clear that the cessation of firing was decided upon in direct contacts between the DGMOs of India and Pakistan,” Jaiswal said.

Lutnick made the submission in the the Court of International Trade last week, while opposing any attempt to restrain President Trump from using emergency powers to impose tariffs.

The top official said the president’s power to impose tariffs is crucial to his ability to conduct real-world diplomacy.

“For example, India and Pakistan - two nuclear powers engaged in combat operations just 13 days ago - reached a tenuous ceasefire on May 10. This ceasefire was only achieved after President Trump interceded and offered both nations trading access with the United States to avert a full-scale war,” Lutnick said in the submission.

“An adverse ruling that constrains presidential power in this case could lead India and Pakistan to question the validity of President Trump’s offer, threatening the security of an entire region, and the lives of millions,” he said.

Earlier, a federal court delivered a significant legal blow to President Donald Trump’s trade strategy on Wednesday, halting a wide-ranging tariff plan that sought to impose heavy taxes on imports from nearly every country.

A three-judge panel from the US Court of International Trade ruled that Trump exceeded his presidential authority by invoking the 1977 International Emergency Economic Powers Act (IEEPA) to justify a national emergency declaration and subsequent tariffs. The decision halts both newly announced levies and earlier ones targeting countries including China, Canada, and Mexico.

“The president does not have unlimited power to regulate trade without the involvement of Congress,” the court wrote in its opinion. The panel stated that while IEEPA grants the president certain emergency powers, it does not provide a blanket mandate to override existing trade policy frameworks.

The administration had argued that long-standing trade deficits constituted a national emergency. Trump had imposed reciprocal tariffs of up to 50% on countries with which the US had trade imbalances and a 10% baseline on most others. While he paused the higher tariffs for 90 days to allow for negotiations, the baseline duties remained in effect.

Legal challenges to the tariffs have been ongoing. Wednesday’s ruling consolidated two such cases — one brought by a coalition of five small businesses and another by 12 US states. The court’s decision leaves intact other tariffs implemented under separate authority, such as those on foreign steel, aluminium, and automobiles.

Trump’s legal team had referenced historical precedent, notably President Richard Nixon’s emergency use of tariffs during the 1971 currency crisis. That situation, however, involved the 1917 Trading With the Enemy Act. The court concluded that the Nixon-era example did not provide adequate justification for Trump’s use of IEEPA in a trade context.

“The court’s decision throws the president’s trade policy into turmoil,” said Wendy Cutler, former US trade negotiator and current vice president at the Asia Society Policy Institute. She noted that trade partners may now reconsider their negotiating positions, opting to delay concessions amid legal uncertainty.

The ruling also highlighted the role of Congress in trade matters. Under the US Constitution, the power to impose taxes — including tariffs — resides with the legislative branch. Over time, Congress has delegated some of this authority to the executive, but the court determined Trump had gone too far.

Eswar Prasad, a professor of trade policy at Cornell University, said the decision “destroys the Trump administration’s rationale for using federal emergency powers to impose tariffs.” He added that it underscores the limitations of executive authority in altering trade relations unilaterally.

Companies affected by the tariffs are expected to reassess supply chain strategies. Some may expedite shipments to the US in case the administration seeks a reversal of the decision through appeal.

While Trump retains more narrowly defined powers under the Trade Act of 1974 — which allows limited tariffs for short periods — the court concluded that the IEEPA did not support the broader measures he implemented. The dispute may ultimately be resolved by the Supreme Court.

US Vice President JD Vance had a phone conversation with Prime Minister Narendra Modi on May 9 that focused on ways to de-escalate the India-Pakistan tensions.

After India launched Operation Sindoor on May 7 in retaliation for the Pahalgam attack, External Affairs Minister S Jaishankar too held a phone conversation with US Secretary of State Marco Rubio and many of his counterparts from across the world.

It is learnt that after Operation Sindoor was launched, India told the US that it would respond to Pakistan’s military actions.