The US has so far announced a 50 percent tariff on India. The new tariffs on India will come into effect from August 27. Trump has argued that India is promoting the war in Ukraine by buying oil from Russia behind imposing an additional 25 percent tariff. However, India has called Trump’s decision baseless and has also said that the US, along with many European countries, is also doing business with Russia. According to the executive order signed by Trump, this additional tariff will be implemented 21 days after the date of issuance of the order.
Reacting to this, India’s Foreign Ministry said, “This action is unfair, unreasonable and irrational.” The order issued by the White House on Wednesday said, “The Government of India is currently importing Russian oil directly or indirectly.”
What is a tariff and how does it work?
Tariff is a tax that is imposed on goods imported from abroad. It is basically a percentage of the price of that item. A 10 percent tariff means that if the price of an item is Rs 100, then a tax of Rs 10 will be imposed on it. That is, after the imposition of tariff, the price of that item will become Rs 110. Tariffs are imposed on the firm that imports the products rather than the exporter. For example, if a firm is importing a car that costs $50,000 per car and a 25 percent tariff will be imposed on it, then the firm will have to pay a tax of $12,500 on each car.
Companies  in the United states of America that import goods from other countries have to pay tax to the government according to the tariff rate. This means that the company can collect the entire burden of tax or a part of it from its customers. If the importing American firm covers the cost of the tariff by increasing the price of the goods, then its economic burden will fall entirely on the American consumers.
When the goods become expensive, its demand may decrease. That is, the higher the tariff, the more the price of the goods can increase. In such a situation, the demand for expensive goods among American consumers will decrease and American companies will import less goods. In such a situation, American companies and consumers will turn to those countries and markets where the goods are cheaper.
In the month of May, the US Trade Court had said that Trump did not have the right to impose many of these tariffs because he did so under national emergency powers. However, the next day an appeals court said that until the final decision on the case is not made, the appropriate taxes can remain in force.
Why tariff?
Trump says that by imposing tariffs, American consumers will buy more American goods. According to him, tax collection will increase by imposing tax on import of goods and this will focus on investing and manufacturing goods in America itself. Donald Trump has often said that tariffs create and protect jobs at the domestic level. Trump sees tariffs as a way to increase the American economy as well as tax revenue. Trump wants to reduce the difference between the goods purchased from other countries of the world and the goods sold by America to other countries.
This is called trade deficit. Trump says that ‘cheaters’ have taken advantage of America. Trump has announced different tariffs on imports from different countries and special goods. When Donald Trump was running his election campaign in the year 2024, he said on one occasion, “Under my plan, American workers will no longer be worried about losing their jobs to foreigners in their own country. Rather, foreigners will be worried about losing their jobs in America.” BBC Economic Editor Faisal Islam says that Trump wants to fundamentally change the global economic map. He also wants to reduce the trade surplus of China and Europe with America, which he sees as ‘looting America’. Trump has also said that tariffs on steel and aluminum, such as the one he introduced as president in 2018, protect America’s national security because it is the ‘foundation of the defense-industrial sector.’
On which the highest tariffs are imposed
At a press conference held at the White House on Wednesday, when BBC correspondent Anthony Zurcher asked Trump, ‘Many countries including China are buying oil from Russia, then why is India being targeted?’ On this, Trump said, “It has been only 8 hours. Let’s see what happens next. You will get to see a lot more. Many additional sanctions can also be seen.” When Trump was again asked, ‘Does the US have any plans to impose additional tariffs on China as well?’ On this, he said, “This can happen. It depends on what steps we take next.”
Recently, Donald Trump had announced to impose new tariffs on more than 90 countries after the expiry of the August 1 deadline given for the trade deal. The countries on which Trump has imposed high tariffs also include BRICS countries. According to the new list, Trump has imposed a 50 percent tariff on Brazil. Apart from this, 30 percent tariff has been imposed on South Africa and China.
- 50 percent tariff on import of steel and aluminum products
- 50 percent tariff on import of copper, this will be applicable from August 1
- 25 percent tariff on foreign made cars, imported engines and other car parts
On July 8 itself, Trump had threatened to impose 200 percent tariff on import of pharmaceutical goods but till now there is no further information on this. Trump had also said that the exemption from tariff on products worth about $ 800 or less will also end from August 29.
How much tariff has been imposed on which country?
The tariffs announced by Trump at different rates have now been implemented on many countries. Most of these were announced on April 2 this year, when Trump said that a 10% ‘baseline tariff’ would be imposed on all imports from all countries.
The tariffs that are in place now are:
- 50% tariff on Brazilian products
- 30% tariff on South African products
- 20% tariff on Vietnamese products
- 19% tariff on Philippine goods
- 15% tariff on Japanese goods
- 15% tariff on South Korean products
US president Donald Trump had announced an additional 25% tariff on India for buying oil from Russia. As a result, the tariff on Indian products will increase to 50% from August 27. The European Union is among those that agreed on a deal within the time given by US President Donald Trump for talks. In the last week of July, both sides agreed that a 15% tariff would be imposed on EU products, including cars. Under this deal, countries in the European Union will charge zero duty on American companies for some products. So far, the UK is the only country that has agreed to impose the lowest tariff of 10 percent on behalf of the US.
What will be the impact of tariffs on the global economy?
Trump’s announcements have caused instability in global stock markets, where companies are selling shares of their businesses. However, the markets have been slightly stable in the last few days. The fluctuations in the stock market also affected many people, even if they were not directly invested in any stock. Because it affected pensions, jobs and interest rates. The value of the US dollar usually remains stable but at one time it also saw a big decline.
The International Monetary Fund (IMF) and the Organization for Economic Co-operation and Development (OECD), considered to be very influential, both predicted a decline in global economic growth rate as a result of tariffs. Both organizations also expressed the fear that the US economy will have to bear the worst impact. The most latest data shows that the US economy grew at an annual rate of 3% between April and June 2025.
Is inflation rising for American consumers?
Analysts say that the effect of tariffs has started showing in the US inflation rate. Inflation in the US has increased from 2.4% to 2.7%. There has been an increase in the prices of clothes, coffee, toys and electric appliances. Well-known company Adidas had confirmed that it would increase prices for American consumers due to tariffs. More than half of the company’s products are made in Vietnam and Indonesia, on which tariffs of 20 and 19 percent have been imposed respectively.
Nike has also said that the prices of its products will increase in the US. This company has also warned that its costs could increase by one billion dollars due to tariffs. Some companies are importing foreign goods in small quantities, due to which the price of available goods is increasing. The cost of American products that require manufacturing materials from abroad is also expected to rise. For example, many parts of a car cross the borders of the US, Mexico and Canada several times before it is fully assembled. The new tariffs will also increase customs checks at the US border, which will naturally cause delays in the movement of products across the border.
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