Trump warns of 25% US tariffs on countries trading with Iran, with no official White House order released so far.
India already faces 50% US duties, and the new threat comes as bilateral trade talks remain stalled.
Trade and strategic interests at risk, including India’s exports to Iran and its stake in the Chabahar port project.
US President Donald Trump on Monday said that any country trading with Iran would face a 25% tariff on all trade with the United States, raising concerns for New Delhi amid ongoing India–US trade negotiations.
“Effective immediately, any country doing business with the Islamic Republic of Iran will pay a tariff of 25% on any and all business being done with the United States of America,” Trump said in a post on his social media platform Truth Social.
1 January 2026
Get the latest issue of Outlook Business
“This order is final and conclusive,” he added, without providing further details.
Iran has been under US sanctions for several years. However, there was no official documentation from the White House outlining the policy or specifying the legal authority under which the tariffs would be imposed.
Concerns Grow Amid India–US Trade Deal Talks
The latest threat comes as India anticipates to conclude India-US bilateral trade agreement. In August, Washington imposed a reciprocal tariff of 25% on India, followed by an additional punitive tariff of 25%, bringing the total duties to 50%—among the highest faced by any major Asian economy.
The punitive tariff was linked to India’s oil and energy imports from Russia. Trump has also issued multiple tariff threats, including a 10% levy on BRICS countries—of which India is a member—and additional duties on agricultural products. These measures, however, have not yet been implemented.
India–Iran Trade Ties Under Scrutiny
The renewed tariff warning comes amid escalating unrest in Iran, which is facing its largest anti-government protests in years. India remains one of Iran’s top five trading partners in recent years.
Major Indian exports to Iran include rice, tea, sugar, pharmaceuticals, man-made staple fibres, electrical machinery, and artificial jewellery. Iran exports dry fruits, organic and inorganic chemicals, and glassware to India, among other goods.
Strategic Stakes at Chabahar Port
Beyond trade, India has significant strategic interests in Iran’s Chabahar port. In 2025, New Delhi sought a six-month extension—until April—for US sanctions exemptions related to the port.
If the exemption lapses, entities involved in operating Chabahar or engaging in related activities could face US penalties under the Iran Freedom and Counter-Proliferation Act, according to The Economic Times.
Chabahar is a critical asset for India’s regional connectivity strategy, particularly its outreach to Afghanistan, as New Delhi’s engagement with Kabul regains momentum.
