New Tariffs on India After China; Trump Grants 90-Day Extension Amid Trade Tensions
Washington, D.C., August 2025 — In a move that could reshape the global trade landscape, U.S. President Donald Trump has announced that while new tariffs will be imposed on India, China has been granted a 90-day extension before similar duties take effect. This decision comes amid ongoing U.S.-China trade tensions and increasing scrutiny on India’s export policies.
According to a senior White House official, the temporary delay for China is aimed at “allowing negotiations to progress and exploring the possibility of a broader trade agreement.” The announcement has already sparked significant reactions across global markets, with analysts predicting ripple effects in manufacturing, technology, and agriculture.
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Background: U.S.-China Trade War Takes Another Turn
For more than two years, the United States and China have been locked in a tit-for-tat trade battle, with tariffs, counter-tariffs, and export restrictions dominating headlines. Trump has consistently framed these measures as essential for “protecting American jobs” and “countering unfair trade practices.”
The new 90-day grace period offers Beijing an opportunity to address U.S. concerns over intellectual property theft, forced technology transfers, and trade imbalances. However, sources close to the negotiations suggest that if no breakthrough is reached, the tariffs will be implemented immediately after the deadline.
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Why India Is Now in the Crosshairs
While China has been the main target of Trump’s trade offensive, India has recently found itself under the microscope. U.S. officials claim that India’s growing exports in certain sectors — particularly pharmaceuticals, IT services, and textiles — are “undercutting American producers” and taking advantage of existing trade loopholes.
The proposed tariffs on India could range from 10% to 25%, depending on the product category. This is particularly significant because India is one of the top 10 trading partners of the United States, with bilateral trade exceeding $150 billion annually.
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The Political Calculus Behind Trump’s Move
Trump’s tariff decisions are as much political as they are economic. With the 2025 U.S. Presidential Election campaign in full swing, trade toughness remains a core talking point for his base. By granting China an extension, Trump can portray himself as a pragmatic dealmaker, while the new India tariffs signal to American workers that he is willing to stand up to all trading partners — not just Beijing.
Political analysts note that targeting India could be risky, given the country’s growing geopolitical importance as a counterbalance to China in the Indo-Pacific region. However, Trump’s administration appears confident that the U.S.-India strategic partnership will weather this economic friction.
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Impact on Global Markets
The immediate reaction from the markets was mixed:
Asian markets showed volatility, with the Shanghai Composite rising on hopes of a deal, while Indian stock indices fell sharply amid concerns about U.S. tariffs.
The U.S. dollar strengthened against the Indian rupee, making imports from India more expensive for American consumers.
Commodities markets saw a dip in crude oil prices, partly due to fears of slowing global demand if the trade disputes escalate.
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Indian Government’s Response
India’s Ministry of Commerce has expressed “deep disappointment” over the tariff announcement, stating that such measures “undermine the spirit of mutual economic cooperation.” Officials have hinted at the possibility of retaliatory tariffs on American goods, particularly agricultural products and energy exports.
Trade experts in New Delhi believe that India might also look to expand trade with the European Union, ASEAN nations, and African markets to offset potential losses from the U.S. market.
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Possible Scenarios After the 90-Day Extension
1. Deal with China, Tariffs on India
If China and the U.S. reach a trade agreement, the spotlight could shift entirely to India, with tariffs going ahead as planned.
2. No Deal with China, Global Trade War Intensifies
Failure to reach a deal could mean tariffs on both China and India, pushing the world closer to a full-scale trade war.
3. Compromise with Both Nations
Trump could use the threat of tariffs as leverage to negotiate improved trade terms with both Beijing and New Delhi, avoiding economic disruption before the elections.
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How Businesses Are Preparing
American companies with supply chains in China are cautiously optimistic about the extension, while firms importing from India are bracing for higher costs.
Tech manufacturers relying on Indian software services are exploring automation and nearshoring options.
Retailers importing textiles from India are seeking alternative suppliers in Vietnam, Bangladesh, and Latin America.
Pharma companies are lobbying Washington to exempt essential medicines from the new duties, given India’s critical role as a generic drug supplier.
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Wider Geopolitical Implications
The tariff decision reflects the complex triangular relationship between the U.S., China, and India. Washington’s balancing act is becoming increasingly challenging as it tries to maintain strategic ties with both Asian giants while protecting domestic industries.
Moreover, with China deepening economic relations with Russia, Africa, and Southeast Asia, and India expanding its BRICS engagement, U.S. trade policy could significantly influence the next decade of global alliances.
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Conclusion: High Stakes for All Parties
Trump’s decision to delay tariffs on China while moving forward with duties on India signals a bold — and risky — trade strategy. The 90-day countdown is now ticking, and the world will be watching closely to see whether this leads to breakthroughs or breakdowns in the global trading system.
For businesses, policymakers, and consumers alike, the message is clear: prepare for turbulence in the months ahead. Whether this ends in trade deals or tariff wars will depend on the negotiating skills — and political will — of the leaders involved.
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