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| Despite an extended deadline, Trump has only secured a handful of deals.Photographer: Bonnie Cash |
By Tamsil Shahezad Khan
Published: July 30, 2025 | Updated: 6:39 AM IST
WASHINGTON — U.S. President Donald Trump indicated Tuesday that India could face tariffs as high as 25%, though he emphasized that no final decision has been made, as both nations race against time to reach a trade agreement before an August 1 deadline.
"I think so," Trump responded when reporters asked whether India might be hit with tariffs ranging from 20% to 25%. His remarks underscore escalating trade tensions and the sluggish pace of negotiations that have failed to produce a comprehensive bilateral deal.
Despite multiple deadline extensions, the Trump administration has secured only a limited number of global trade agreements, raising questions about the U.S. strategy to restructure its international trade relationships. The potential tariff on India would represent a dramatic escalation that could significantly damage bilateral relations.
Tariff Uncertainty Creates Global Ripple Effects
The threat of substantial tariffs on Indian imports is part of Trump's broader trade strategy, which he claims will safeguard American industries and narrow trade deficits. However, economists and policy experts warn that these measures are hampering global economic growth while creating market instability.
Recent analysis suggests that "Trump's tariffs are already stunting world growth while markets shrug," highlighting a concerning disconnect between the real economic impact of these policies and investor reactions in financial markets.
India, representing one of America's most important Asian trading partners, has expressed serious concerns about the potential consequences of such duties. Government officials in New Delhi caution that the tariff threat, combined with broader global economic headwinds, could severely disrupt export industries and create widespread uncertainty for sectors dependent on U.S. market access.
Economic Reality: Who Bears the Cost?
While the Trump administration maintains that foreign governments and international companies will shoulder the financial burden of these tariffs, extensive economic research demonstrates that American consumers and businesses typically absorb much of the additional costs through higher prices.
"Tariff revenue may look like a win for Washington, but the cost is eventually passed down to American households and small businesses," explained a policy analyst at the Brookings Institution, highlighting the domestic consequences of the administration's trade approach.
This reality has reignited debate over the true impact of America's ongoing trade disputes on ordinary citizens and small enterprises across the country.
Expanding Tariff Campaign
The potential India tariffs represent just one front in Trump's expanding trade offensive. Recent measures have targeted diverse sectors, from Canadian automotive exports to Mexican agricultural products, creating uncertainty throughout North American supply chains.
The Department of Justice has simultaneously intensified enforcement of trade compliance regulations, while the U.S. Trade Representative prepares to defend the administration's controversial approach before congressional oversight committees.
Trump has also continued promoting populist initiatives, including proposals to distribute rebate checks to Americans using tariff revenue—a plan that critics dismiss as political theater designed to boost support ahead of the 2026 midterm elections.
Last-Minute Negotiations Under Pressure
With the August 1 deadline rapidly approaching, American and Indian negotiators are engaged in intensive discussions aimed at resolving longstanding disputes over digital services taxation, agricultural market access, and other contentious trade issues.
"There's still work to be done," acknowledged a senior Trump administration official. "We're hopeful, but not over the finish line yet."
The president, currently managing multiple international commitments alongside domestic political obligations—including a scheduled golfing retreat in Scotland—has not ruled out implementing the tariffs unilaterally should negotiations collapse.
Uncertain Future for Global Trade
Whether Trump will ultimately proceed with the threatened 20-25% tariff on Indian goods remains unclear. What has become evident, however, is that the international trading system continues to experience significant upheaval under his leadership, forcing both allies and competitors to fundamentally reassess their economic strategies.
As one Indian official observed, "We're preparing for every scenario. The world's trading order is shifting—and we have to adapt."
The outcome of these trade talks will likely have far-reaching implications not only for U.S.-India relations but for the broader structure of international commerce in an increasingly fragmented global economy.
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