Months after announcement, Trump's reciprocal tariffs finally take effect
This story was originally published at 10:28 IST on 7 August 2025
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MUMBAI – Four months after the first announcement, the US has finally implemented the reciprocal tariffs. "IT'S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!," US President Donald Trump Thursday said on his Truth Social platform.
Trump first announced reciprocal tariffs on US' trading partners on Apr. 2, but suspended them till Jul. 9. Trump again extended the deadline for reciprocal tariffs to Aug. 1 and then once more till Thursday. Trump has announced tariffs on more than 50 countries, which came into effect 0930 IST Thursday.
Effective Thursday, Indian exports to the US will face a tariff of 25%. This will rise to 50% from Aug. 27 after the US Wednesday levied additional tariff of 25% on India for buying crude oil from Russia. Once implemented, the 50% tariff will be among the highest faced by any country, alongside Brazil.
The 25% tariff announced by Trump last week had already posed a significant risk to India's exports, given that the US accounts for nearly 20% of India's total outbound shipments in value terms. With the latest hike, the risks to India's export and growth have doubled.
India exported goods worth $86.51 billion to the US in the financial year 2024-25 (Apr-Mar) and had a trade surplus of $40.82 billion, according to the commerce ministry data. According to experts, the 25% tariff announced earlier could itself bring India's total exports below $400 billion in FY26, the first time in four years this would happen and could lower GDP growth by 20-30 basis points.
Since April, the US has secured trade deals with several economies, including the UK, European Union, and Japan. New Delhi and Washington have been negotiating a bilateral trade agreement for several months now, with the next round of negotiations scheduled to begin Aug. 25.
During the last round of negotiations in July, the two countries had extended talks but failed to sign a deal, mainly because of differences over market access for agricultural and dairy products. Exporters were hoping the bilateral trade agreement would shield Indian goods from adverse tariff impact but that seems a distant dream now. End
US$1 = INR 87.70
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Shubham Rana
Edited by Subhojit Sarkar
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