Trump’s tariff wall still stands, India must find its way

The Indian government has responded to the USTR’s proposals by saying that it is engaging with the US on the issue, while also working towards finalising the framework agreement announced by the two countries earlier this year.

3 min readJun 5, 2026 06:50 AM IST

First published on: Jun 5, 2026 at 06:50 AM IST

On Tuesday, the US Trade Representative proposed tariffs on 60 countries under Section 301 of the US Trade Act, 1974 — economies that together account for 99.4 per cent of all US imports. That the proposal has come up now — the USTR will hold hearings on the proposed actions on July 7 — is no accident. After the US court struck down the policy of reciprocal tariffs brought through the International Emergency Economic Powers Act, Trump had imposed a 10 per cent levy on all trading partners through Section 122 of the Trade Act. This tariff could, however, be levied only for a maximum of 150 days, unless extended by the US Congress. That period will end on July 24. The USTR’s investigation and its proposals now create space for White House to move ahead with its trade agenda.

Of the 60 countries, 54 are said to have failed “to impose a legal prohibition on the importation of goods” that have been produced by forced labour and have allegedly been unable “to effectively enforce such a prohibition”. This category includes a wide range of countries — from China and India to Saudi Arabia, Australia, Switzerland, the UK, and others. Another six countries —EU, Canada, Indonesia, Mexico, Ecuador, and Pakistan — are said to have “failed to effectively enforce a forced labour import prohibition”. The USTR has proposed two sets of tariffs — 10 per cent and 12.5 per cent. India falls in the latter category. However, this is not all. Attempts to reinforce the tariff wall are playing out across multiple arenas. Another investigation was launched in March to look into the issue of “structural excess capacity and production in manufacturing sectors” of 16 economies, including countries like India and China. All this suggests that, despite judicial setbacks, tariffs will likely remain key to the Trump agenda.

The Indian government has responded to the USTR’s proposals by saying that it is engaging with the US on the issue, while also working towards finalising the framework agreement announced by the two countries earlier this year. On Wednesday, Sergio Gor, the US Ambassador to India, said that the negotiations had mostly wrapped up, with only a few points still to be ironed out. As India moves forward with its trade deal with the US, it must be mindful of the unpredictable nature of the White House administration. It should press for greater market access while safeguarding its interests.