The world this week | India gets breather ahead of trade talks with US; Pakistan’s shift to crypto raises concerns; foreign students in US under duress | UPSC Current Affairs News

On Wednesday, the US Court of International Trade deemed Trump’s sweeping tariffs illegal, determining that he overstepped his authority by invoking the 1977 International Emergency Economic Powers Act (IEEPA) to impose these tariffs on goods imported into America from almost every nation.

A day later, an appeals court – the Federal Circuit Court in Washington, DC that has jurisdiction over the trade court – temporarily halted the decision, which means the levies are back for now and the case will probably end up in the Supreme Court.

However, the Trump administration has also slapped other sector-specific tariffs such as on steel, aluminium, cars and car parts under a different statute known as Section 232. There are chances that provisions such as Section 232 would now be used to impose such sector-specific tariffs on countries, especially if the Federal Circuit Court were to also rule against the IEEPA levies.

But until the final word on the matter, India has some breathing room in its ongoing trade talks, particularly with the US’s demand seeking access to several sectors that traditionally enjoy high protection, such as agriculture, automobiles, and alcoholic beverages.

Amid concerns over the impact of trade deals with foreign countries on India’s agricultural export, import and the surplus, especially with the US and EU seeking greater market access for their agricultural products, data highlights significant trends.

India’s agriculture exports increased from $43.3 billion in 2013-14 to $51.9 billion in 2024-25. Meanwhile, imports have shown steadier expansion from $15.5 billion in 2013-14 to an all-time high of $38.5 billion in 2024-25, working out to 148%.

In the meantime, India’s goods exports worth at least $775 million to the UK continue to face the risk of higher duties under its Carbon Border Adjustment Mechanism (CBAM), despite the conclusion of a Free Trade Agreement (FTA) earlier this month.

UK’s CBAM was not part of the FTA, but it will initially target carbon-intensive products such as iron, steel, aluminium, fertilisers, hydrogen, ceramics, glass and cement, with scope to expand the list in future.

Pakistan’s embrace of crypto raises concerns in India

That apart, a dramatic element in the unfolding tariff saga was the claim by the Trump administration that the President averted a full-scale war and brokered a ceasefire between India and Pakistan by offering both nations trading access with the US – a claim categorically denied by India.

The simultaneous revelation of an agreement that Pakistan inked with World Liberty Financial Inc (WLFI), a crypto firm majority-owned by Trump and his family, prompted experts like C Raja Mohan to ask India to reflect on its crypto strategy. The shady deal has raised concerns on various fronts, such as:

— As of May 6, when India launched Operation Sindoor in response to the April 22 Pahalgam terror attack, the WLFI was sitting on a Senate panel’s request, seeking details of its dealings with Pakistan Prime Minister Shehbaz Sharif.

— Trump’s dual role, as WLFI promoter and the self-proclaimed political broker (in the recent India-Pakistan military conflict), has raised concerns over conflict of interest.

— Although the details of the agreement are yet to emerge, it includes grand plans to use blockchain technology to boost financial inclusion and facilitate remittances for cash-strapped Pakistan, with Bilal bin Saqib, the head of the Pakistan Crypto Council, calling his country and Bitcoin as “victims of bad PR”.

— As Pakistan turns to cryptocurrency to solve its economic challenges, India is advised to pay close attention amid concerns over the “possible misuse of these digital currencies not controlled by any central bank to fund terror and launder money across borders”.

All the while, India’s multiple delegations are fanning out to carry its anti-terror message worldwide. On Sunday, a team led by senior Congress leader Shashi Tharoor reached the US, where he underlined the need for a “new normal” in the face of the Pahalgam terror attack. Another team, led by BJP MP Baijayant Panda, arrived in Kuwait, while the delegation led by Sanjay Jha engaged with the Indian diaspora in South Korea.

However, as the Indian delegation landed in the US, concerns were growing over the Trump administration’s hardline immigration stance.

Foreign students caught in crosshairs amid crackdown on US varsities

Over 3,31,000 Indian students studying in the US are caught in the crosshairs as the Trump administration targeted universities. This week, it directed federal agencies to terminate an estimated $100 million worth of remaining contracts with Harvard by June 6, as part of its broader efforts to reform institutions like Harvard and Columbia.

Foreign students, including Indians, enrolled at Harvard are under duress amid the unfolding crisis as the federal Joint Task Force to Combat Antisemitism warned that if Harvard wishes to continue receiving federal support, it must “commit to meaningful change”. The university has filed a lawsuit challenging the funding freeze and a related move to revoke its ability to enrol foreign students.

A diplomatic cable issued on Tuesday added to the pressure in which the State Department asked its embassies and consular sections to halt new interviews, which began earlier this month, as it weighs requiring all students to undergo social media vetting as part of their application process. This move comes despite the visa application (DS-160) already requiring applicants to disclose their social media platform and identifiers.

The US Embassy in India also issued a warning to Indian students studying in the US: “If you drop out, skip classes, or leave your program of study without informing your school, your student visa may be revoked, and you may lose eligibility for future US visas.”

The situation has unsettled international students, who contribute nearly $43.8 billion annually to the US economy, according to NAFSA. These students are often top performers in science, technology, engineering, and mathematics (STEM) fields.

Hence, the pause, if implemented, will be a significant blow to US universities, whose annual international student intake hovers around the 1 million mark (1.12 million in the 2023-24 academic year).

The ongoing crackdown has begun as a campaign pitch to “reform” elite universities, including Harvard and Columbia, and has now expanded its scope. The US administration is planning to cancel all remaining contracts with Harvard University, worth about $100 million, while finding “alternative vendors” for future services. Contracts with around nine federal agencies would be affected, which would also affect researchers at some of India’s leading medical colleges and scientific institutions.

In April, the federal government froze more than $2 billion in grants and contracts with Harvard, citing non-compliance with requests to modify hiring and admissions policies, dismantle diversity-equity-inclusion (DEI) programmes, and conduct ideological vetting of international students. Harvard has filed a lawsuit challenging both the funding freeze and the move to revoke its ability to enrol foreign students.

UN calls Gaza ‘hungriest place’ as Hamas reviews ceasefire proposal

These developments in the US come amid growing global instability, including in Gaza, which the UN has described as the “hungriest place on Earth”. The war-riven enclave’s 2.3 million people are facing “catastrophic hunger”, as Hamas is reviewing a new ceasefire proposal.

As the UN and European countries mounted pressure on Israel to end the war and its 11-week-long blockade on Gaza, a limited amount of aid began entering the besieged enclave under the control of a new NGO backed by Israel and the US – the Gaza Humanitarian Foundation (GHF).

However, 20 people were shot by Israeli troops at a GHF aid distribution point on Friday as they desperately tried to get food, Al Jazeera reported, citing sources at Gaza hospitals.

While Arab states rejected the new aid system as illegal, the UN and international aid groups also refused to work with the GHF, saying, according to Reuters, it is not neutral and has a distribution model that forces the displacement of Palestinians.

Meanwhile, Hamas is reviewing a US proposal for a 60-day ceasefire that has reportedly been accepted by Israel. According to Reuters, the ceasefire would see humanitarian aid delivered by the UN, the Red Crescent and other agreed channels; and the release of 28 Israeli hostages – alive and dead – in exchange for the release of 1,236 Palestinian prisoners and the remains of 180 dead Palestinians.

Despite these efforts, hope for peace for the Palestinians remains elusive as Israel blocked a planned meeting of Arab ministers in the Palestinian administrative capital of Ramallah in the occupied West Bank.

Reuters cited an Israeli official as saying that the “provocative meeting” intended to discuss the establishment of a Palestinian state and that “such a state would undoubtedly become a terrorist state in the heart of the land of Israel”.

The move comes ahead of an international conference, co-chaired by France and Saudi Arabia, due to be held in New York on June 17-20 to discuss the issue of Palestinian statehood. French President Emmanuel Macron said on Friday that recognising a Palestinian state was not only a “moral duty but a political necessity”.

Iran, US issue terse warnings 

After several rounds of Iran nuclear talks, US President Trump this week said that he told Israel to hold off on any strike against Tehran as it “would be inappropriate to do right now because we’re very close to a solution”.

“I want it (nuclear agreement) very strong where we can go in with inspectors, we can take whatever we want, we can blow up whatever we want, but nobody getting killed. We can blow up a lab, but nobody is gonna be in a lab, as opposed to everybody being in the lab and blowing it up,” Trump told reporters on Wednesday at the White House.

However, Iran retaliated in equal measure, warning that Trump’s threat to destroy its nuclear facilities is a clear red line and will have severe consequences, the semi-official Fars News Agency reported on Friday.

The Islamic Republic said that “if the US seeks a diplomatic solution, it must abandon the language of threats and sanctions”, adding that such threats “are open hostility against Iran’s national interests”, Reuters reported, citing an unnamed Iranian official.

Israel has been threatening a bombardment of Iranian nuclear facilities. According to a Reuters report, which cited Gulf sources, Saudi Arabia’s defence minister, Prince Khalid bin Salman, visited Tehran in April and delivered a blunt message to Iranian officials: take Trump’s offer to negotiate a nuclear agreement seriously because it presents a way to avoid the risk of war with Israel.

Iran and the US have held five rounds of nuclear talks in Oman and Italy, with the last round being described by Iran’s Foreign Minister Abbas Araghchi as “one of the most professional rounds of negotiations” yet.

Russia, Ukraine to hold another direct peace talks 

Days after the first direct talks between Russia and Ukraine failed to yield a ceasefire, the two sides will resume direct peace talks in Istanbul on Monday, but Kyiv insisted that Moscow provide a promised memorandum on ending the more than three-year war before they sit down to negotiate.

Questioning Russia’s commitment to peace, Ukrainian President Volodymyr Zelenskyy said, “For a meeting to be meaningful, its agenda must be clear, and the negotiations must be properly prepared.”

“Unfortunately, Russia is doing everything it can to ensure that the next potential meeting brings no results,” he wrote on X on Friday after hosting Turkey’s foreign minister for talks in Kyiv.

Russia’s Foreign Minister Sergei Lavrov on Wednesday publicly invited Ukraine to hold direct negotiations with Moscow. In a video statement, Lavrov said Russia would use Monday’s meeting to deliver an outline of Moscow’s position on “reliably overcoming” what it calls the root causes of the war, The Associated Press reported.

Russia and Ukraine held their first direct peace talks in three years in Istanbul on May 16, which resulted in no significant breakthrough except an agreement on the largest prisoner exchange of the war. It was carried out last weekend and freed 1,000 captives on each side.

Post Read Questions

Why has a crypto agreement between Pakistan and World Liberty Financial Inc (WLFI), a firm majority-owned by Donald Trump and his family, has alarmed India? Evaluate.

Comment on India’s diplomatic push post-Pahalgam attack, with delegations spanning different countries world over to shape narratives on terrorism. 

How could the ongoing US crackdown on universities and student visas affect its global standing as a destination for higher education?

In what ways might India need to recalibrate its student and research diplomacy with the US in light of these emerging restrictions?

Why did the UN and other international aid groups refuse to cooperate with the Gaza Humanitarian Foundation (GHF) backed by the US and Israel? Does the GHF’s distribution model conflict with international humanitarian principles?

Send your feedback and ideas to ashiya.parveen@indianexpress.com.