Trump Threatens 20-25% Tariff on Indian Imports as Trade Deal Still Under Negotiation

US President Donald Trump said that the country might hit India with a tariff rate of 20-25%, while warning the final levy has still not been imposed as both the nations are still negotiating a trade deal before the August 1 deadline.

When asked about a possible tariff rate for India, President Trump said, “India has been a good friend, but India has charged basically more tariffs than almost any other country.” He further said aboard, “You just can’t do that.”

Any tariff rate charged 20% or higher would be a disappointment for India as they had been seeking a better deal than the 19% that has been offered to Indonesia and the Philippines. As per an earlier Bloomberg report, the US and India were working toward an agreement that would reduce proposed tariffs to below 20%. This is despite Modi administration’s resistance against demands to open up the agricultural and dairy sectors.

Indian officials have expressed optimism on reaching a deal but relations with the US have hit some turbulence in recent months. Additionally, the US president has also threatened “secondary tariffs” on India China and other buyers of Russian oil if President Vladimir Putin doesn’t end hostilities with Ukraine.

On Monday, US Trade Representative Jamieson Greer said that the country needed more time for talks with India to gauge the country’s willingness to open its market more to American exports. Reuters earlier reported that New Delhi is bracing for higher tariffs likely between 20% and 25%.

India has also conveyed to the Trump administration the red lines it won’t breach in finalizing an agreement, officials familiar with the matter told Bloomberg last week. Currently, India is not willing to open its dairy and automobile sectors and it also won’t allow the US to export genetically modified crops to the country, people said on the condition of anonymity.

In addition to that, India is also willing to offer zero tariffs on some goods such as auto components and pharmaceuticals.

India and the US have already signed terms of reference for a bilateral trade deal but have been still negotiating an interim agreement so that India gets a relief from the higher US import duties.

Trump’s comments come ahead of an August 1 deadline when the reciprocal tariffs are expected to take effect on dozens of trading partners. Back in April, Trump announced higher levies before pausing those tariffs at a reduced 10% rate to allow time for negotiations. Despite an extended deadline, Trump has only secured a handful of deals.

Trade Deals Signed between US and Other Trading Partners

On May 2025, Trump reached a tariff-reduction agreement where China agreed to cut retaliatory duties from 125% to 10%, while U.S. retained a baseline tariff in addition to future market access commitments. Trade officials from China and the US concluded their talks in Stockholm and as per the US negotiators, the potential extension of a tariff pause between the two countries will not be agreed to until President Trump signs off on the plan.

Additionally, the United States and European Union signed a trade deal on Sunday, bringing an end to a months-long standoff. Following negotiations between Trump and European Commission President Ursula Von der Leyen, a 15 percent tariff has been imposed on EU goods entering the US and significant US energy and military equipments purchased by EU, BBC reported. The list of goods on which tariffs will be imposed include cars, computer chips and pharmaceuticals.

In yet another trade deal signed this month, Trump announced that the US will now levy a 19% tax on imports from the Philippines.