President Donald Trump has announced a new round of trade penalties, including a 25% reciprocal tariff on goods from India, which will be implemented on August 1. This move is accompanied by an unspecified penalty for purchases from Russia. Trump justified the tariff on India by claiming the country has some of the highest tariffs and the “most strenuous and obnoxious non-monetary Trade Barriers” in the world. He argues that these barriers have restricted US business with India and that the new tariffs are a necessary response to create a more balanced trade relationship.
In a post on his social media platform, Truth Social, Trump celebrated the effectiveness of his tariff-based economic policies, stating that tariffs were making “America great and rich again.” He claimed that the US had successfully countered a decades-long “onslaught of tariffs against it,” and that the “tide has completely turned.” Trump’s post also expressed his belief that the US had gone from a “dead country” to the “hottest” in the world, linking this success directly to his protectionist agenda.
The Indian government has issued a cautious response to the new tariffs. The Ministry of Commerce and Industry released a statement saying it has “taken note of the announcement” and is “studying its implications.” The ministry also highlighted that India and the US have been engaged in negotiations for a “fair, balanced, and mutually beneficial bilateral trade agreement,” signaling a desire to continue diplomatic talks. This measured reaction suggests that New Delhi is not rushing to a confrontational stance.
The statement further emphasized the government’s commitment to “protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs.” This indicates that the Indian government will prioritize the interests of its domestic industries as it formulates its response to the new tariffs. The situation presents a significant challenge to the US-India economic relationship and will require careful diplomacy from both sides to avoid a full-blown trade war.
