In a striking move, President Donald Trump has unveiled a dramatic escalation in trade tensions by doubling tariffs on India, citing its importation of Russian oil as a key concern.
According to NBC News, this decision, raising tariffs from 25% to 50%, marks a significant shift in U.S.-India trade relations and places India among the most heavily tariffed U.S. trading partners.
The tariff hike stems from an executive order issued by Trump, in which he pointed to India's direct or indirect purchase of oil from Russia as the justification for the increase. According to the order, Indian goods entering the United States will now face an additional 25% duty on top of an existing 25% rate. This initial 25% tariff, part of a broader global trade policy affecting most U.S. trading partners, is set to take effect on Wednesday night.
The additional 25% duty specific to India will be implemented within 21 days following the announcement, further straining economic ties. With a total tariff rate of 50%, India now joins Brazil as one of the highest-tariffed nations in U.S. trade, surpassing countries like Syria at 41%, Myanmar at 40%, and Switzerland at 39%. Trump elaborated on his reasoning during a recent interview, expressing frustration over India's trade practices and its energy dealings with Russia.
"India has not been a good trading partner, because they do a lot of business with us, but we don't do business with them," Trump told CNBC on Tuesday. "So we settled on 25% [tariffs] but I think I'm going to raise that very substantially over the next 24 hours, because they're buying Russian oil. They're fueling the war machine," he added.
In the executive order, Trump further stated, "I find that the Government of India is currently directly or indirectly importing Russian Federation oil" and due to those purchases, imports of Indian goods into the United States "shall be subject to an additional ... rate of duty of 25%."
India swiftly responded to the tariff announcement on Wednesday, condemning the move as excessive and unwarranted. "These actions are unfair, unjustified and unreasonable," stated a release from the Indian government. The Ministry of External Affairs also declared, "India will take all actions necessary to protect its national interests," signaling potential retaliatory measures.
India has previously noted that its purchase of Russian oil was conducted with U.S. backing, adding a layer of complexity to the current dispute. Economically, India plays a significant role in U.S. imports, ranking as the tenth-largest source of goods in 2024 with a value exceeding $87 billion, according to Commerce Department figures. Key imports from India include a wide range of products such as glass, metals, chemicals, plastics, rubber, machinery, mechanical equipment, and agricultural items.
Amidst this trade friction, tech giant Apple finds itself navigating a delicate situation with its supply chains heavily reliant on India. Last quarter, India accounted for 44% of U.S. smartphone imports, overtaking China, as reported by Canalys via Bloomberg. Apple CEO Tim Cook stated in May that the majority of iPhones sold in the U.S. would soon originate from India, highlighting the country's growing manufacturing role.
Despite this, most of Apple's popular products currently remain exempt from tariffs while the Commerce Department conducts a Section 232 investigation to evaluate the national security implications of these imports. Apple has already reported an $800 million financial hit last quarter due to tariff-related issues, with a projected $1.5 billion impact in the coming three months. Adding to the developments, Apple is slated to announce a new U.S. investment on Wednesday, with CEO Tim Cook joining Trump at the White House for the occasion, as confirmed by an official to NBC News.
Trump has long pressed for domestic manufacturing, particularly with Apple, as evidenced by a social media post from May. "I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else," Trump wrote. This stance reflects his broader dissatisfaction with companies shifting supply chains from high-tariff nations like China, where rates reached 145%, to other countries such as India.
Trump's tariff actions are part of a larger global trade war initiated in April, affecting numerous U.S. trading partners with sweeping duties. White House advisers had often hinted at a potential trade agreement with India as a pioneering deal, though the first such pact was ultimately signed with the United Kingdom. The timing of the tariff announcement coincided with U.S. Special Envoy Steve Witkoff's visit to Russia, where he met with President Vladimir Putin, as captured in state TV footage.
The relationship between Trump and Indian Prime Minister Narendra Modi has seen rapid changes, with Modi being the fourth foreign leader to visit Trump at the White House during his second term.
This tariff escalation adds tension to an already complex bilateral relationship, balancing trade, geopolitics, and strategic interests. As both nations navigate this economic standoff, the global trade landscape continues to shift, with significant implications for businesses and consumers alike.