Trump’s Tariff Offensive on Indian Goods Sparks Backlash from U.S. Experts and Global Analysts

 Washington/New Delhi | July 7, 2025 — U.S. President Donald Trump’s decision to impose an additional 25% tariff on Indian goods, raising total duties to a steep 50%, has triggered alarm among U.S. manufacturers, economic experts, and global policy observers, many of whom warn that the move risks backfiring on the U.S. economy and derailing relations with one of its closest strategic partners.

The tariffs, which are set to take effect 21 days from August 7, target key sectors of Indian exports—including textiles, footwear, gems, and jewellery—and could impact nearly 55% of India’s total shipments to the United States, New Delhi's largest export market. The decision, framed by Trump as a response to India’s continued import of Russian crude oil, comes after five rounds of stalled trade talks and growing diplomatic friction.

“This Should Be the Easy One” – American Voices React

Former Republican Governor Chris Sununu voiced concern over the escalating row, stating, “The India one scares U.S. manufacturers the most. They’re our ally—this should be the easy one. India is going to be the world player, right?” Sununu added that numerous countries and companies are currently outsourcing to India, highlighting its global economic importance.

F. Krystle Kaur, a NATO trade policy advisor, called Trump’s tariff order “detrimental to bilateral relations,” stating, “I’m extremely disappointed. This move creates mistrust and risks undoing years of careful diplomacy. It’s not just about trade—it’s about strategic alignment.”

Speaking to CNBC, veteran market analyst David Woo predicted that India might call Trump’s bluff. “If the Indians hold out, they might find that Trump will blink first. He has no appetite for higher oil prices. The real question is whether Modi is ready to play that game of chicken.”

Indian economist and commentator Sharad Kohli echoed these sentiments, describing the move as “self-destructive.” “Trump is alienating a natural ally. The U.S. depends heavily on India for its tech and medical sectors. This is not a smart battle to pick,” he said.

India Condemns Tariffs, Defends Energy Policy

In a strongly worded statement, India’s Ministry of External Affairs (MEA) called the decision “unfair, unjustified, and unreasonable,” stating that Russian oil imports are governed by market dynamics and are essential for the energy security of 1.4 billion citizens.

“India will take all necessary steps to protect its national interests,” the MEA added, noting that other nations continue to buy Russian oil without facing similar penalties—suggesting the U.S. decision was selective and discriminatory.

The tariffs also come shortly after President Trump labeled India’s economy “dead” and accused it of profiting from discounted Russian crude while ignoring the humanitarian fallout of the Ukraine conflict. The sharp escalation marks a significant downturn in ties that had warmed earlier this year following a high-level bilateral summit.

Geopolitical Realignment on the Horizon?

The timing of the tariff announcement is notable, as Prime Minister Narendra Modi prepares to visit China for the first time in over seven years—a move being watched closely in diplomatic circles for signs of India's shifting strategic posture amid cooling relations with Washington.

Despite the hostile rhetoric, New Delhi has so far refrained from announcing retaliatory tariffs, opting instead to explore domestic relief measures for affected exporters, including interest subsidies and credit support.

Economic Impact Already Visible

The market response has been swift. The Indian rupee weakened in offshore trading, stock futures dipped, and oil prices ticked up by 1% following news of the tariff escalation and an unexpected drop in U.S. crude inventories.

Export organizations have voiced deep concern. S.C. Ralhan, President of the Federation of Indian Export Organisations, called the move a “severe setback.” He noted that Indian exporters now face a 30–35% competitive disadvantage against peers from Vietnam, Bangladesh, and Japan.

“This level of tariff makes U.S.-India trade practically unviable,” said Madhavi Arora, chief economist at Emkay Global. She warned that India's GDP growth could slip below 6% if the situation escalates further.

The Road Ahead: Room for Dialogue?

Despite the current impasse, some analysts believe the 21-day implementation window may signal an opening for backchannel negotiations. A senior Indian official, speaking on background, said, “We believe Washington is leaving the door ajar for talks, but India will not enter them under threat.”

Whether this trade standoff deepens into a full-blown diplomatic freeze—or transitions into high-level negotiation—remains to be seen. For now, the world watches as two of the world's largest democracies engage in an increasingly complex economic showdown.