Potential Future Consequences of Court Ruling Against Trump's Tariffs: Trump Threatens Another Great Depression-like Event
In the global trade arena, the US-India relationship has faced a significant shake-up with the escalating tariff row between the two nations. The dispute, which has been ongoing since August 6, 2025, has caused economic and sectoral disruptions, but experts predict that the overall relationship will endure in the long run.
The US government imposed an additional 25% tariff on many Indian goods, bringing the total tariffs up to 50% under US trade laws. This move poses a potential threat to India's substantial export engine, with $87 billion in exports to the US (2.5% of India’s GDP) at risk. The tariffs have been implemented due to concerns over national security, unfair trade practices, and India's ties with Russia and its membership in BRICS [1].
Some sectors, such as engineering exports, could see a $4–5 billion drop, and India's GDP growth projections have been downgraded by up to 0.5 percentage points, from 6.5% to as low as 6% [1]. Small and medium enterprises, especially in textiles and leather—key export sectors—face reduced competitiveness compared to countries with lower tariffs like Vietnam and Bangladesh.
Indian financial markets have shown mixed reactions: stock indices briefly rose while the rupee weakened in offshore markets, indicating inflation and debt servicing concerns for Indian companies [1].
Despite these economic tensions, analysts suggest that the overall US-India relationship will survive these tariff disputes due to broader strategic and geopolitical considerations [2]. The trade strains have put pressure on economic ties but have not derailed the long-term diplomatic relationship, which includes cooperation in security, technology, and regional influence [2].
Prime Minister Narendra Modi has stated that India will prioritize its interests and protect its farmers, fishermen, and dairy sector, even if it comes at a high cost. His comments were perceived as a direct response to US President Donald Trump's imposition of a 50% tariff on India for its ongoing purchases of Russian oil [3].
The Indian government has termed the 50% tariff imposed by the US as "unfair, unjustified, and unreasonable." However, they have not yet announced specific retaliatory measures against the US. Pakistan faces a 15% tariff under the new tariffs, while products from the European Union, Japan, and South Korea face a 15% tariff, and those from Taiwan, Vietnam, and Bangladesh are levied at 20% [1].
Trump hailed his sweeping tariffs as a catalyst for stock market gains on August 8, 2025, but Prime Minister Modi has emphasized that India is prepared to pay a heavy price to protect its interests [3]. The tariff row between India and the US continues to escalate, and it remains to be seen how both nations will navigate this challenging period in their bilateral relationship.
[1] The Economic Times, August 8, 2025 [2] The Hindu, August 10, 2025 [3] NDTV, August 12, 2025
- Despite the escalating tariff row between the US and India, analysts predict that the overall US-India relationship will endure in the long run due to broader strategic and geopolitical considerations.
- The US government's imposition of a 50% tariff on Indian goods, including engineering exports, could potentially lead to a $4–5 billion drop, particularly in key sectors like textiles and leather.
- Indian politicians, such as Prime Minister Narendra Modi, have expressed a willingness to pay a high price to protect domestic sectors like farming, fisheries, and the dairy industry from the effects of tariffs.
- The US-India trade dispute has also been influenced by broader geopolitical considerations, with concerns over India's ties with Russia and its membership in the BRICS [1] playing a role in the tariff row, as well as the ongoing purchases of Russian oil by India [3].
[1] The Economic Times, August 8, 2025 [2] The Hindu, August 10, 2025 [3] NDTV, August 12, 2025
