President Trump’s aggressive tariff strategy against India failed to stem the tide, as the US trade deficit with the South Asian giant swelled to $58.2 billion in 2025 from $45.7 billion prior. US government data reveals this counterintuitive outcome despite 50% duties on Indian goods.
Zooming out, America’s December trade gap hit $70.3 billion, a jump from November’s $53 billion, with India’s share at $5.2 billion. Annually, the deficit totaled $901.5 billion, stable against 2024’s $903.5 billion. Exports grew to $3,432.3 billion (+$199.8B), but imports outpaced at $4,333.8 billion (+$197.8B).
Breaking it down, goods trade suffered a $1,240.9 billion deficit (up $25.5B), while services surplus reached $339.5 billion (up $27.6B). Top deficit sources: EU $218.8B, China $202.1B, Mexico $196.9B, Vietnam $178.2B, Taiwan $146.8B, and now India at $58.2B.
Legal hurdles emerged when the Supreme Court invalidated the initial tariffs. Trump pivoted swiftly, activating Section 122 of the 1974 Trade Act for a 150-day 10% import tariff starting February 24. This presidential power addresses payment imbalances via targeted surcharges.
Exemptions protect vital sectors: essential minerals, bullion metals, energy, resources, fertilizers, ag products, pharma ingredients, electronics, autos, and others. The White House emphasizes this as a precise tool for resolving core trade vulnerabilities without broad disruption.
This development signals potential shifts in bilateral ties. With tariffs rebounding despite judicial pushback, stakeholders eye impacts on supply chains, inflation, and diplomatic relations. The deficit’s persistence suggests deeper economic forces at play beyond punitive measures.