Trump's global tariffs take effect, India hit hardest with 50% over Russia oil trade

Arabian Business

7 hours ago

A sweeping series of new US tariffs targeting more than 90 countries officially came into effect at midnight in Washington, in what is now the most significant protectionist trade action by the United States since the 1930s.
The move marks a significant escalation in President Donald Trump's push to overhaul global trade rules under his principle of 'reciprocal tariffs,' targeting countries he says impose unfair barriers on US exports or fail to align with Washington's foreign policy agenda.
'IT'S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!,' Trump wrote on Truth Social moments before the deadline passed.
The original tariff deadline of July 9 was extended to August 1, and the new tariffs officially kicked in on August 7.
India hardest hit
India is among the hardest-hit nations, with a total of 50 per cent tariffs imposed on a wide range of goods. An initial 25 per cent tariff took effect today, with an additional 25 per cent scheduled for August 27. Trump linked the move directly to the nation's ongoing oil trade with Russia.
'India has not been a good trading partner. They do a lot of business with us, but we don't do business with them… They are buying Russian oil and fueling the Russian war machine,' Trump wrote on August 6.
'India is our friend, but their tariffs on American goods are FAR TOO HIGH. Their obnoxious non-monetary trade barriers are unacceptable. Starting Friday, they will face an extra penalty. America First!' he added in a July 30 post.
India has condemned the move, calling it 'unfair, unjustified and unreasonable,' and vowed to protect its national interests.
Indian export sectors reacted sharply. Shares of major textile and seafood exporters such as Gokaldas Exports, KPR Mill, and Avanti Feeds dropped 3–4 per cent in early trading. Kerala-based seafood exporters expressed concern they may be priced out of the US market altogether.
Semiconductors face 100% import tariff
Also taking effect is a 100 per cent tariff on all foreign-made semiconductors, unless they are produced in the US or by firms with ongoing investment in US-based manufacturing. The move is part of the administration's broader effort to bolster domestic chip production and reduce reliance on foreign suppliers.
While chipmakers like TSMC, Samsung, and SK Hynix have large operations in Asia, officials in South Korea and Taiwan say those companies may be exempt from the new rules due to current US investment commitments. The White House has not yet clarified its position.
Prices of consumer electronics — including laptops, smartphones, and gaming consoles — are expected to rise by 18–20 per cent as a result of the tariff. US-based firms like Nvidia, which already manufacture chips domestically, may benefit from the policy shift.
Wider global impact
The tariff rollout impacts countries across Asia, Europe, and the Americas:
Brazil: Faces a 50 per cent tariff on exports to the US after Trump accused President Luiz Inácio Lula da Silva of undermining American tech firms and called the prosecution of former President Jair Bolsonaro a 'witch hunt.'
Laos and Myanmar: Penalised with a 40 per cent tariff, both nations have strong manufacturing ties with China — a pattern reflected in several other targets of the policy.
Canada: Tariffs rose from 25 per cent to 35 per cent after the White House accused Canada of 'failing to cooperate' in reducing the cross-border flow of fentanyl and other drugs.
'I am announcing a 50 per cent TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT,' Trump wrote in another Truth Social post. 'Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even Hypersonic Weapons. THIS IS, AFTER ALL, OUR GOLDEN AGE!'
Some US allies have managed to negotiate partial relief from the measures. The European Union reached a framework agreement that allows a 15 per cent tariff on goods from the bloc, while Japan and South Korea also secured reductions.
Last week, Trump announced a 'full and complete' trade deal with South Korea that sets a 15 per cent tariff on South Korean imports, in exchange for $350 billion in US-controlled investments, $100 billion of which is in energy purchases, and full market access for American goods including cars, agriculture, and trucks.
Japan signed a strategic trade agreement with the US in July, accepting a 15 per cent tariff in exchange for $550 billion in US-directed investments and expanded access for American agricultural and automotive exports. Taiwan, a major US trading partner, however, remains in negotiations with Washington after receiving a temporary 20 per cent tariff, with talks focused on semiconductor cooperation and potential pledges for further US investment.
Mexico, meanwhile, was granted a 90-day extension on further tariff hikes as trade negotiations continue. The country, however, still faces a 25 per cent tariff during this period, especially linked to fentanyl concerns.
Middle Eastern countries, including Gulf states, are largely excluded from punitive tariffs due to their energy exports being exempt, though Iraq, Algeria, Libya, and Tunisia face new levies of up to 30 per cent amid stalled trade talks.
Economic disruption expected
The average US tariff rate now stands at 15.2 per cent, up from just 2.3 per cent in mid-2024 — a historic jump. The Biden-era tariffs, which were rolled back or frozen, have now not only been reinstated but expanded under Trump's new framework.
According to estimates from multiple market research groups, the new tariffs are expected to significantly increase prices across a variety of consumer categories:
CATEGORY EXPECTED PRICE INCREASE
Clothing & Apparel 36–37%
Leather Goods 39–40%
Electronics 18–20%
Fresh Produce 6.7%
Coffee Significant (Brazil hit 50%)
Furniture & Appliances 3–5%
Automobiles 4–6%
The average American household is projected to face $2,400 to $2,700 in additional annual costs due to higher import prices. Low-income families are expected to be the most impacted, given their reliance on affordable imports from tariffed countries.
A broader strategy
The White House says the goal of the tariffs is to rebuild America's industrial base and restore fairness to global trade. Trump's approach combines economic and geopolitical objectives, applying tariffs not only to correct trade imbalances but also to influence foreign policy decisions — as seen with India's oil purchases and Canada's drug control efforts.
In multiple posts, Trump has highlighted his 'America First' vision and the need for trade partners to 'play fair or pay.'
'The August first deadline is the August first deadline — It stands strong, and will not be extended. A big day for America!!!' Trump wrote on July 30.
'Starting Friday, they will face an extra penalty. America First!' he added in another post aimed at India.
While the long-term economic effects remain to be seen, the short-term impact is already being felt through market volatility, rising prices, and renewed diplomatic tensions. Trade officials from multiple countries have confirmed ongoing negotiations with the US, but the new tariffs have already redrawn the landscape of global commerce.
Trump's use of emergency powers under the 1977 International Emergency Economic Powers Act (IEEPA) to impose tariffs is facing multiple legal challenges, with a federal appeals court reviewing the case and a potential Supreme Court showdown expected.