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Trump’s New Tariff Escalation: Will Bharat’s Global Trade Role Be Undermined — or Provoke a Reset?

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Published on: 6 Aug 2025
Trump’s New Tariff Escalation: Will Bharat’s Global Trade Role Be Undermined — or Provoke a Reset?

Trump now plans to “very substantially” raise tariffs on India, citing oil trade with Russia. While final figures are unclear, they could go as high as 125%, possibly affecting critical sectors like pharma and electronics—and even Apple’s iPhone supply chain.

What Happened?

  • In a fresh interview on CNBC’s Squawk Box, Trump reiterated a sharp tariff escalation on Indian goods, just days ahead of the formal implementation.
  • His justification: India is still buying Russian oil, thereby “fueling the war machine.”
  • Though he had settled on 25% tariffs, he now hints at massively increasing them within 24 hours.

What Could It Mean for India?

  • India may now face secondary tariffs of up to 100–125%.
  • No hard exemptions confirmed—leaving room for major industries like pharmaceuticals, electronics, and iPhone assembly to be affected.
  • Apple, which recently moved major iPhone manufacturing to India, could be caught in the crossfire.

China’s Case as a Reference Point:

  • Trump said he may not meet Xi Jinping unless a formal deal is reached.
  • Experts believe China never requested a meeting, and Xi would only agree if a deal is nearly done.
  • This suggests Trump is using similar tactics with India—public threats before formal deals.

India’s Position & What to Watch:

  • No clear tariff ceiling yet, but speculation is rife that India will be lumped into secondary Russia-related sanctions.
  • Sectors like pharma, tech, and energy could be hit unless exempted.
  • If Trump follows the Brazil model, where 50% tariffs were imposed but with broad exemptions, India may push for similar deals.

What Bharat Must Prepare For:

  • Short-Term: Negotiate sector-specific exemptions to shield key exports.
  • Mid-Term: Leverage platforms like BRICS, WTO to challenge unilateral tariffs.
  • Long-Term: Reduce dependence on U.S. markets by diversifying trade corridors (Africa, ASEAN, Latin America).

“Fueling the war machine”—Trump’s line could mark a new phase of pressure diplomacy against India. Bharat’s best reply? Policy clarity, supply chain strategy, and global coalition building.

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Quick Info

What new tariff threat has Trump made against India?
Trump has threatened to 'very substantially' raise tariffs on Indian goods, possibly up to 125%. This escalation is linked to India’s continued purchase of Russian oil, which Trump claims is funding the war in Ukraine.
Why is Trump targeting India with higher tariffs?
Trump justifies the tariff hikes by accusing India of 'fueling the war machine' through its continued import of Russian oil. He is using tariffs as a form of pressure diplomacy to shift India’s energy sourcing strategy.
How could the new tariffs affect the Indian economy?
If implemented, tariffs up to 125% could hit key export sectors like pharmaceuticals, electronics, and even iPhone assembly operations. These sectors are crucial to India’s economic growth and global manufacturing role.
Could Apple's iPhone supply chain be affected by Trump’s tariff plan?
Yes. Apple recently shifted significant iPhone manufacturing to India, and if electronics are included in the tariff scope, it could disrupt Apple's supply chain and increase costs for American consumers.
Are there currently any exemptions planned for Indian exports?
As of now, no sector-specific exemptions have been confirmed. This uncertainty leaves all major export sectors potentially vulnerable to the proposed tariff hikes.
How does this compare to Trump’s approach with China?
Trump is employing similar tactics with India as he did with China—issuing public tariff threats ahead of formal negotiations. Like his stance toward Xi Jinping, he uses pressure to extract trade concessions.
What is the 'Brazil model' mentioned in the article?
The 'Brazil model' refers to Trump imposing 50% tariffs on Brazil but granting broad sectoral exemptions. India may seek a similar outcome to protect key exports if negotiations proceed.
What are India’s short-term strategies to counter the tariffs?
India’s immediate strategy includes negotiating for sector-specific exemptions to protect vital industries like pharma, tech, and electronics from excessive tariff burdens.
What mid-term actions could India take in response?
India could leverage platforms such as BRICS and the WTO to challenge the legality of unilateral tariffs and coordinate with other nations facing similar economic pressures.
What long-term steps should India consider to safeguard trade?
Long-term measures include diversifying export markets beyond the U.S. by deepening trade corridors with Africa, ASEAN, Latin America, and other emerging regions to reduce dependency on American trade routes.
Is there a set timeline for when the new tariffs might be implemented?
Trump hinted that the sharp increase in tariffs could be finalized within 24 hours of his CNBC interview, though exact dates and final figures were not disclosed in the excerpt.
How significant is India’s reliance on the U.S. for its exports?
India relies heavily on the U.S. as a top export destination, especially for sectors like pharmaceuticals and electronics. Major tariff increases could disrupt this trade dynamic significantly.
What is meant by 'secondary Russia-related sanctions' in this context?
Secondary Russia-related sanctions refer to punitive measures placed on countries or companies that engage in trade with Russia. India risks being grouped into such measures due to its continued oil purchases.
Could India’s energy sector be affected by these tariffs?
Yes. While the excerpt doesn’t list specific measures against the energy sector, its inclusion in the list of potentially affected areas implies that tariffs could disrupt India's oil trade logistics and related exports.
What diplomatic message is Trump sending with these tariff threats?
Trump’s remarks, particularly the phrase 'fueling the war machine,' suggest a shift toward aggressive economic pressure to influence India’s foreign policy choices—especially its relations with Russia.

In-Depth Answers

What does the article recommend India do to prepare?
The article advises India to maintain policy clarity, develop a resilient supply chain strategy, and build international coalitions to counteract unilateral trade threats and maintain export stability.
How might global platforms like BRICS help India in this situation?
BRICS can serve as a multilateral forum where India can build support against U.S. unilateralism, coordinate alternative trade mechanisms, and push back diplomatically against tariffs tied to political disagreements.
Why is Apple’s involvement in India mentioned as significant?
Apple’s iPhone manufacturing shift to India is a key example of how global firms are relying on India as a production hub. Disrupting this with tariffs could affect global supply chains and investor confidence.
What risks does the tariff escalation pose to U.S. consumers?
If tariffs hit essential goods like electronics or pharmaceuticals, American consumers could face higher prices and reduced product availability, particularly for goods assembled or manufactured in India.
How might these developments affect India–U.S. relations long-term?
Escalating economic threats without diplomatic resolution could erode trust, strain bilateral ties, and push India to seek deeper alliances outside the U.S.-led trade ecosystem.
What role do interviews and public media appearances play in Trump’s trade strategy?
Trump often uses public interviews to telegraph upcoming policy shifts and apply pressure ahead of formal negotiations. His CNBC remarks are consistent with this approach to economic diplomacy.
What’s the strategic significance of Trump's timing in raising tariffs?
The timing suggests a deliberate effort to shape the narrative and force India’s hand just before formal policy announcements, maximizing negotiation leverage and media attention.
Is there any indication that India might change its oil import policy from Russia?
The excerpt does not indicate any immediate change in India’s oil sourcing from Russia, suggesting India intends to uphold its strategic autonomy despite U.S. pressure.
What broader lesson does the article imply for Indian economic policy?
The article emphasizes the importance of diversifying trade, maintaining supply chain independence, and preparing for geopolitical risks—especially as India becomes more central in global manufacturing.
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