US tariffs of 50% on most imports from India kick in today, affecting key commodities like basmati rice, spices, pulses, tea, dairy products, and processed food. US President Donald Trump followed through with his threat to impose the levies due to India’s purchase of discounted Russian oil.
Marine products like seafood and processed fruits also face disruption and are now subject to higher taxes. The move comes weeks after Trump issued a new 25% baseline tariff on Indian goods. India, the world’s fifth largest economy, is the recipient of one of the highest tariff charges among all countries hit by US levies.
Trump had previously called India a “friend” but stated its tariffs remain “far too high.” Any hopes of reaching a negotiation to cap taxes at 15% faltered after India failed to open its agriculture market to the US for fear of hurting poor farming communities. Rival exporters look set to capitalize on the situation, with nations like Turkey and Thailand, which face lower US tariffs, well positioned to offer American buyers cheaper alternatives.
According to the India Brand Equity Foundation, India’s agricultural exports to the US in 2024 totaled US$5.7 billion, roughly 11% of the country’s total agricultural exports.
India’s response to the tariffs so far has been defiant, with the country refusing to halt the purchase of Russian oil.
Canada drops retaliatory tariffs
Meanwhile, Canada has announced that it will scrap some retaliatory tariffs on the US. The move resulted from the US reaffirming its commitment to the Canada-United States-Mexico Agreement (CUSMA), protecting trade between the parties.
Canadian agri commodities like meat (beef, pork), grains, processed foods, baked goods, and animal feed had been targeted by Trump’s levies. Prime Minister Mark Carney announced that Canada will remove all tariffs on goods from the US by September 1, but levies on steel and aluminum will remain for now.
Carney also shared that US levies on the country remain the lowest among all its trading partners, stating that more than 85% of Canada-US trade is now tariff-free.
Canada had previously placed a 25% tax on around US$21.7 billion worth of US goods, which included products like orange juice.
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This piece was written by Rali Videnova, Market Research Analyst at Vesper and Sade Laja, Writer
