Trump’s 50% tariff shock: Why & how it might hit YOU

US President Donald Trump just made a move that could take away your job, unsettle your start-up and could potentially kill your American dream, if you had one.

The move could also potentially take an estimated $25 billion away from the table, as far as India’s exports to the United States are concerned.

I am talking about the 50% tariff bomb that Donald Trump just dropped on India. He had already announced a 25% tariff on Indian imports to the United States. That came into effect on August 7, 2025.

Now, acting on Trump’s threat that he will penalise India for buying crude oil from Russia, the Trump administration has announced an additional 25% tariff on Indian goods.

US rationale for additional 25% tariff

Announcing the move, the White House said the US President had found that India was currently importing Russian Federation oil.

It added that to address the national emergency stemming from the Government of the Russian Federation’s actions taken against Ukraine, Trump was imposing an additional 25% tariff on imports from India, effective 27 August.

Once this new layer of tariff comes into effect, the overall US tariff on Indian goods will surge to 50%.

Russian oil and Trump’s Tariff threat

The move came a day after Trump accused India of profiting from Russian oil, while not caring about the killing in Ukraine.

In a post on his social media platform Truth Social Trump said, “India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits.”

Trump further added, “They don’t care how many people in Ukraine are being killed by the Russian War Machine. Because of this, I will be substantially raising the Tariff paid by India to the USA."

25% additional tariff: India’s response

The Indian government responded to the additional tariff move, calling it “unfair, unjustified and unreasonable.” A statement by the Ministry of External Affairs noted that the United States has in recent days targeted India’s oil imports from Russia.

It reiterated India’s position on the issues, saying that India’s imports were based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India.

Given the context, the MEA said, it was “extremely unfortunate” that the US should choose to impose additional tariffs on India for actions that several other countries were also taking in their own national interest.

The MEA statement concluded by adding that India will take all actions necessary to protect its national interests.

$25 billion impact on India

What does this tariff shock mean for the Indian economy? Experts have estimated that it could potentially hit somewhere between 30-50% of India’s goods export to the United States.

Currently, India’s goods export to the US stands at around $85 billion. If we consider the conservative estimate on the tariff impact for India’s exports, it comes to around a $25 billion hit.

The sectors that are most likely to be impacted include textiles, chemicals, gems and jewellery, auto components and shrimp among others.

Trade talks: The ray of hope

However, not all is lost. The US trade talks team is scheduled to visit India on 25 August, for the sixth round of negotiations on the bilateral trade deal. If the two sides manage to strike a middle path in those two days, we may not hit the 50% tariff wall at all.