Is America entering a new phase in the global trade wars? President Trump’s doubling down on India—hiking tariffs to a 50% levy on most Indian imports—marks more than a diplomatic spat. As detailed in multiple reports, the US now imposes some of its highest tariffs globally on a top trading partner, citing India’s Russian oil imports. Why does this matter for the US economy?
India is the world’s fifth-largest economy and the US's largest growth market for export-driven industries. These steep tariffs impact $48–$87 billion in annual IT, apparel, and manufacturing imports. Key knock-on effects include:
- Up to 70% plunge in Indian exports to the US for sectors like textiles and leather, threatening millions of jobs in India
- Potential retaliation from India targeting American aerospace, oil, and chemicals
- Rising input and consumer costs for US manufacturers and households, feeding upward inflationary pressure
India isn’t backing down—officials promise continued oil purchases in the name of energy security, and New Delhi is exploring new markets and domestic incentives to offset US headwinds. But American companies with deep India ties (think Microsoft, Google, and JPMorgan) are on notice: access and operating conditions could become trickier in both directions.
