From Truce to Tariff War: Trump’s Second Term Sparks Escalating U.S.

In brief:

2018–2019: The U.S. imposed Section 232 tariffs (25% on steel, 10% on aluminum) that included Indian exports, prompting India to retaliate in June 2019 with duties on 28 U.S. products like nuts and lentils.
2023: A partial de-escalation occurred. Under a WTO-negotiated resolution, India removed certain retaliatory duties (e.g., on chickpeas, almonds), while the U.S. offered administrative relief for Section 232 exclusions.
Early 2025 Transition: India avoided immediate retaliation and signaled willingness to negotiate once the new U.S. administration took office.

This period set the stage but no sweeping new tariffs on India occurred between early 2023 and the presidential transition.

Modi’s U.S. visit (Feb 12–15): Aimed to reset trade; discussed “Mission 500,” targeting $500B bilateral trade by 2030, and agreements on energy and defense deals.
Indian concessions: Reduced tariffs on motorcycles and whiskey, offered to review more, and increased U.S. energy and defense imports to ease tensions.

The U.S. implemented a 27% “reciprocal tariff” on Indian imports under newly applied policy. India continued to express willingness to negotiate rather than retaliate.

By July 30, no deal had materialized. Trump announced a 25% reciprocal tariff effective August 1, plus a warning of further penalties due to India buying Russian military and energy supplies.
On August 4, the U.S. raised the threat of additional tariffs, citing broader geopolitical grievances and framing it as coercion over India’s foreign policy orientation.
On August 6, Trump raised the total U.S. tariff on Indian imports to 50%, effective August 27, stacking an extra 25% specifically penalizing Indian oil purchases from Russia with limited exemptions.

India responded sharply: PM Modi called the move “unfair” and “unjustified,” warned of a steep cost, and vowed to resist while monsoon-dependent sectors like farming emerged as domestic flashpoints.
Indian markets reacted adversely: the rupee fell, precious metals surged, and base metals and energy sectors saw volatility.
Some businesses and trade analysts predicted the impact might be temporary, as affected industries pivot to alternative markets like the EU or Middle East.

Trump’s second-term trade policy pivoted from traditional economic reasoning to geopolitics-driven tariffs, using import duties as blunt diplomatic levers targeting India’s oil choices and broader allegiances rather than trade imbalances alone.
The abrupt escalation and lack of formal negotiation protocols have left global partners in strategic limbo.

Sources:

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From Truce to Tariff War: Trump’s Second Term Sparks Escalating U.S.–India Trade Conflict