Defying expectations, US tariffs on India have not curbed trade imbalances—in fact, they’ve coincided with a record $58.2 billion deficit in 2025, compared to $45.7 billion before. Official US statistics highlight this amid President Trump’s protectionist push.
Monthly trends show December’s overall deficit exploding to $70.3 billion from $53 billion, including $5.2 billion with India. For the year, total deficits held at $901.5 billion versus $903.5 billion in 2024. Export growth of $199.8 billion to $3,432.3 billion was nearly matched by $197.8 billion import rise to $4,333.8 billion.
Goods dragged the balance with a $1,240.9 billion deficit (up $25.5B), cushioned by services at $339.5 billion surplus (up $27.6B). India’s position among offenders: behind EU ($218.8B), China ($202.1B), Mexico ($196.9B), Vietnam ($178.2B), Taiwan ($146.8B).
A Supreme Court ruling deemed original 50% tariffs illegal, prompting Trump’s workaround via Trade Act Section 122. This enables a 150-day 10% tariff on imports from February 24, tackling ‘fundamental payments problems’ with surcharges and curbs.
Key exemptions include strategic goods: minerals, currency metals, energy, fertilizers, farm outputs, drugs, electronics, vehicles. Per White House details, these carve-outs ensure targeted action preserves supply security.
The saga reflects broader trade war complexities. As deficits grow despite interventions, analysts debate policy effectiveness, urging multilateral approaches over unilateral tariffs. US-India commerce, vital for tech and pharma, hangs in balance amid evolving regulations.