25% Tariff and Penalty on America's 'Friend' India

July 30, 2025: US President Donald Trump announced on Wednesday that India will face a 25% tariff starting August 1, citing high tariffs and trade barriers as reasons for the relatively limited business between the two nations. He criticized India's military purchases from Russia and emphasized its role as a major buyer of Russian energy, especially amidst the Ukraine conflict.

In a post on Twitter (X), Trump stated that in addition to the tariff, India would incur penalties related to these actions. He also mentioned the significant trade deficit the US has with India. The announcement follows previous warnings from US Senator Lindsey Graham about potential tariffs on countries buying oil from Russia, specifically naming India, China, and Brazil. NATO chief Mark Rutte echoed this sentiment, advocating for stringent sanctions against nations continuing trade with Russia.

The US-India Trade Deal

After days of uncertainty, the US President hinted at imposing a tariff rate of 20-25% on India, emphasizing that nothing is finalized. Donald Trump referred to India as a "good friend" but noted that India imposes higher tariffs on the US than almost any other nation. India's Commerce Minister Piyush Goyal reiterated that India will only agree to a trade deal when it aligns with national interests. Earlier announcements indicated a 26% tariff for India, but backlash led to a temporary 90-day halt, followed by extensions aimed at finalizing the agreement before the new August 1 deadline.