London, UK – August 26, 2025

A New Chapter of Trade Friction as Tariffs Escalate

A new and challenging chapter in global trade has opened as the United States has moved to escalate its tariff policy, imposing significant new levies on imports from both the European Union and India. The move, framed by the White House as a necessary step to “rebalance” trade, has been met with immediate condemnation and is poised to reshape international economic relationships.

For the European Union, the US has imposed a 15% tariff on a broad range of its imports. While this rate is lower than some of the more drastic measures previously floated, it remains a historically high levy and applies to a significant portion of EU goods entering the American market. This new measure comes on top of existing 50% tariffs on EU steel and aluminum, intensifying a dispute that has been simmering for years. The European Commission has already begun consultations on potential countermeasures and is preparing for a legal challenge at the World Trade Organization (WTO).

The situation is even more acute with India, where the US has imposed a steep 50% tariff on a wide array of goods. This move, which has been cited as a penalty for India’s continued purchases of Russian oil, has created a major rift in the strategic partnership between Washington and New Delhi. The impact is expected to be particularly severe on India’s labor-intensive sectors, such as textiles, leather, gems, and jewelry, which employ millions of people. Indian exporters have been rushing to clear their US orders ahead of the August 27 deadline, when the new tariff rate will take effect.

Headlines of the Report

 * EU Tariffs Escalate: The US has implemented a new 15% tariff on most EU imports, adding to existing high levies on steel and aluminum.

 * India Hit Hard: India faces a new 50% tariff on its exports to the US, a measure reportedly linked to its energy trade with Russia, which is a major blow to key industries.

 * Boycott Movement in India: The new tariffs have sparked a widespread boycott movement in India against American products, with political groups and social media campaigns urging citizens to “buy local.”

 * Economic Consequences: The tariffs are expected to hurt both the affected economies and American consumers, who will face higher prices for a range of imported goods.

 * Geopolitical Ramifications: The trade disputes are straining diplomatic relations and pushing affected nations to seek alternative trade partners, with India and Brazil actively deepening ties with other countries, particularly within the BRICS bloc.

In India, the public reaction has been swift and decisive. The tariffs have fueled a growing and increasingly vocal boycott movement against American products. Political groups and activists, including the Swadeshi Jagran Manch, a group linked to the ruling party, are leading the charge. They have organized rallies, distributed leaflets, and launched social media campaigns with slogans like “Foreign companies, leave India” and hashtags like #BoycottUSA. The movement encourages Indians to switch from popular American brands like Coca-Cola, Apple, and McDonald’s to local alternatives.

Economists and industry leaders on both sides of the Atlantic and in India have expressed deep concern about the potential for a full-blown trade war. The tariffs are expected to disrupt global supply chains, increase costs for businesses, and lead to higher prices for consumers. For India, a country with a significant trade deficit with the US, the 50% tariff is seen as a disproportionately heavy burden compared to those faced by other major trading partners. The Indian government has vowed to protect its domestic industries and has indicated that it is exploring options to mitigate the impact, including providing credit assistance and other targeted measures to affected sectors.

As the US doubles down on its protectionist trade policies, the rest of the world is left to grapple with the economic and diplomatic fallout. The escalating trade disputes are not only creating uncertainty in the marketplace but are also pushing allied nations to re-evaluate their long-term economic and security relationships with the United States.