New tariff structure takes effect August 7
US President Donald Trump has signed a sweeping executive order introducing higher tariffs on several nations and the European Union, escalating his administration’s trade confrontation with key partners. Titled “Further Modifying the Reciprocal Tariff Rates“, the order is set to take effect on August 7, seven days after its issuance, with tariff rates reaching as high as 41%.
India has been assigned a 25% “Reciprocal Tariff, Adjusted,” making it one of the most affected major trading partners. The White House justified this move by citing India’s “obnoxious non-monetary trade barriers,” consistent trade deficits, and its ongoing energy and defence ties with Russia.
“Take dead economies down together”: Trump’s sharp rhetoric
In a strongly worded remark, President Trump stated, “Take dead economies down together, don’t care,” highlighting the aggressive tone of the new policy direction. His administration has repeatedly emphasized the goal of rebalancing trade dynamics that it views as unfair or detrimental to US economic and national security interests.
While the original implementation date was August 1, the deadline was extended to August 7 to allow US Customs and Border Protection to update systems and harmonize rates.
Global impact: Who’s hit the hardest
The order imposes adjusted reciprocal tariffs on 95 countries and territories, based on trade deficits and strategic alignment with US interests. Among the highest penalties:
- Syria: 41%
- Laos & Myanmar: 40%
- Switzerland: 39%
- Iraq, Serbia, Canada: 35%
- South Asia: India at 25%, Pakistan at 19%, Sri Lanka and Bangladesh at 20%
- China continues to face 30% tariffs from prior measures.
The European Unionhas a complex, tiered structure: goods with a duty of less than 15% will see adjusted tariffs, while items with a duty abovethat threshold remain exempt.
Pakistan, which announced a deal with the US on Thursday, has received a 19% tariff rate, while Bangladesh’s rate, which earlier stood at 35%, has been brought down to 20%. Pakistan was earlier hit with a 29% reciprocal tariff in April.
India in focus: Strategic ties tested
The tariff decision comes amid rising US concerns over India’s energy imports from Russia. US Secretary of State Marco Rubio explicitly cited India’s continued purchase of discounted Russian oil as a point of frustration, despite its status as a strategic partner. “It helps sustain Moscow’s war effort,” he said, referring to the ongoing conflict in Ukraine.
Trump further criticized India for its trade practices, claiming that it maintains “obnoxious” non-monetary barriers and fails to provide adequate access for American exports.
India responds: Trade talks ongoing
India’s Ministry of Commerce has responded by stating it will act in the country’s national interest. The ministry is currently assessing the full impact of the tariff hike and ongoing penalties. It also confirmed that discussions for a fair and reciprocal trade agreement with the United States are in progress.
So far, five rounds of negotiations have been held, with a sixth round expected later this month. India has remained firm on contentious sectors such as agriculture and dairy, rejecting US demands for wider market access.
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