Donald Trump's India tariffs set to hit US shoppers hard: Phones, auto parts, jeans, jewellery to get costlier

Time of India

a day ago

US President Donald Trump's recent announcement of a 25% tariff on Indian imports, effective August 1, could lead to noticeable price hikes for American consumers across several essential sectors. From smartphones and clothing to auto parts and jewellery, the impact is expected to be broad and significant. The move, announced via Trump's Truth Social platform, has drawn attention for its potential to disrupt trade flows and raise costs in the US at a time when inflation remains a concern.
India a key supplier in critical sectors
India plays a central role in supplying a wide range of goods to the US. According to Reuters, the country is a major exporter of smartphones, automotive parts, cut and polished diamonds, pharmaceuticals, and ready-made garments. Many mid-range Android phones and even components for Apple products are assembled in India, as noted in a report by Counterpoint Research.
With a 25% tariff now in place on these items, US-based tech companies may pass on increased production costs to consumers. Apparel, too, is likely to become more expensive. Forecasts from Yale's Budget Lab and the Associated Press suggest that clothing prices may rise by as much as 17%, even after accounting for possible substitution with alternative sources.
Industry-wise impact of new tariffs
The new tariffs vary across product categories. Indian exports of jewellery and diamonds to the US, worth $9.9 billion in FY2023-24, will now face a 24% tariff. Textile and garment exports, valued at $9.6 billion, will be subject to a 9% tariff. On the other hand, pharmaceuticals, which account for $8.1 billion of exports, will see no additional tariffs.
The automobile sector is another area of concern. India exported $2.2 billion worth of auto components to the US in 2023, including parts like engines, gear assemblies, brakes and wiring harnesses. Reports in The Economic Times and Business Standard highlight the US auto industry's dependence on these parts to keep manufacturing costs low. A 25% tariff could not only make car repairs more expensive but may also slow down vehicle assembly in the US.
Donald Trump has just imposed a 25% tariff on India. He has also imposed a penalty. ⦁ Modi campaigns for Trump.⦁ Gives out slogans like 'Abki Baar Trump Sarkar'. ⦁ Hugs him like a long-lost brother.In return, Trump goes on to impose such harsh tariff on India. It is… pic.twitter.com/EOq0i03mf7
Possible consequences for the US healthcare sector
While pharma exports are not directly hit by the new tariffs, concerns remain over broader trade tensions. India currently supplies nearly 40% of all generic medications used in the US, according to the US Food and Drug Administration (FDA). These generics are essential for treating cancer, heart conditions, diabetes and infectious diseases. As reported by The New York Times, any disruption or cost increase in this supply could burden US hospitals and patients with higher medical expenses.
US President Donald Trump announces 25% tariffs on India starting August 1st.Posts, "Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the… pic.twitter.com/eqVj981lGD
Trump's justification and economic implications
Trump justified the tariff move by calling out India's 'high tariffs' and 'non-monetary trade barriers,' labelling them the most 'strenuous and obnoxious' of any country. He wrote on Truth Social, 'India is our friend, but we have done relatively little business with them because their tariffs are far too high.'
However, some analysts believe the strategy could backfire on the US. With India exporting over $77 billion worth of goods to the US in FY2023-24, and tariffs now averaging 2.8% across all categories, the burden of these costs will likely fall on American importers and consumers.
Trump's tariff decision, while framed as a pushback against trade imbalances, may end up making daily essentials from smartphones to medicines more expensive for average Americans. As businesses prepare to adjust, consumers may soon start feeling the pinch in their pockets.
To stay updated on the stories that are going viral follow Indiatimes Trending.