26 Aug 2025 : The tariff tensions between the US and India have deepened after the Donald Trump administration outlined plans to implement a 50 per cent tariff on products from India in a draft notice published Monday. The move, aimed at penalising India for continuing to buy Russian crude oil, has drawn a sharp response from Prime Minister Narendra Modi, who asserted that India would not compromise on the interests of farmers, small-scale industries and domestic producers.
The US administration had earlier announced plans to double tariffs on Indian goods from 25 per cent to 50 per cent, saying it was necessary to pressure Russian President Vladimir Putin into peace talks with Ukraine.
“That’s going to be up to them. It takes two to tango, I always say, and they should meet,” Trump said, even as efforts to bring Putin and Ukrainian President Volodymyr Zelensky face-to-face have failed to yield results.
The tariff threat comes as US President Donald Trump intensifies economic pressure on Russia while also targeting countries he accuses of discriminating against American technology firms. Trump has defended tariffs not only as a trade tool but also as a means to “stop wars”, while Vice President JD Vance underlined that India’s inclusion in the secondary sanctions framework was part of a broader push to weaken Moscow’s oil economy.
Trump administration’s notice outlines tariff plan
A draft notice published by the US Department of Homeland Security said the higher levies would apply to Indian products “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 27, 2025″.
India will not compromise, says PM Modi
Speaking in Ahmedabad after launching multiple projects, PM Narendra Modi on Tuesday made it clear that India would withstand external pressure.
“For Modi, interests of farmers, cattle rearers and small-scale industries are paramount. Pressure on us may increase, but we will bear it all,” Modi said, urging citizens and businesses to prioritise swadeshi goods.
Hitting out at the Congress, he accused the opposition party of making India dependent on imports to facilitate “scams”. Drawing on both Mahatma Gandhi’s call for self-reliance and Lord Krishna’s symbolism of strength, Modi said, “India is empowered by walking on the path of Sudarshan Chakradhari Mohan Lord Shrikrishna and Charkhadhari Mohan Mahatma Gandhi.”
Trump warns other countries
Even as Modi targeted India, Trump widened his threats to European countries and others that have introduced digital service taxes and regulations on tech companies.
“Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology,” the US President wrote on Truth Social, warning of “substantial additional tariffs” and export restrictions on US chips and technology unless such measures were scrapped.
“America, and American Technology Companies, are neither the ‘piggy bank’ nor the ‘doormat’ of the World any longer,” he added.
The warning appeared aimed at the European Union’s Digital Markets Act and the UK’s digital tax, though Trump did not name countries.
In June, Trump called off trade talks with Canada in retaliation against Ottawa’s planned digital services tax, which would have applied to US multinational companies such as Alphabet, Amazon and Meta that provide services to Canadians.
Shortly after, Canada said it would rescind the taxes impacting US tech firms.
Since returning to the presidency in January, Trump has imposed tariffs on allies and competitors alike, with varying rates for different countries’ products.
Trump claims wars were stopped because tariffs and trade
Defending his aggressive trade policy, Trump claimed tariffs had helped avert global conflicts during his earlier term. “Of the 7 wars I stopped, 4 were because I had tariffs and trade,” he said.
“We are taking trillions of dollars in tariffs and stopping wars due to tariffs,” he said.
Vice President Vance seconded the claim, telling NBC’s Meet the Press that Washington was applying “aggressive economic leverage” against Russia.
“Maybe we will apply additional pressure, or maybe we feel like we are making progress, and we will dial that pressure back,” he said, adding that the US still had “a lot of cards left to play”.
India’s outreach to Russia and China
India, meanwhile, has resisted US pressure to cut oil imports from Russia, arguing that affordable energy is critical to its economic stability. New Delhi has simultaneously stepped up outreach to both Moscow and Beijing, signalling it will not allow external powers to dictate its energy choices.
Summary:
As Trump’s 50% tariff deadline ends tomorrow, India readies countermeasures while PM Modi responds with key diplomatic and trade updates.