Trump's New Order: 25% Tariff on Countries Trading with Iran
On January 13, U.S. President Donald Trump imposed a new tariff on countries that conduct business with Iran, following similar actions against Russia. Trump announced that any country trading with Iran will face a 25% tariff on all trade with the United States. This order takes effect immediately and will not offer any exemptions. India, which is already facing a 50% tariff, could be significantly impacted by this new mandate.
However, government sources suggest that the new tariff will not have a major effect on India. The announcement comes at a time when Iran is experiencing one of its largest anti-government protests in recent years. Moreover, Trump is concerned about a pending hearing in the U.S. Supreme Court regarding his tariffs. He has expressed that if the Court overturns his decisions, "everything could be thrown into disarray."
Trump wrote on his social media platform, Truth Social, "Effective immediately, any country doing business with the Islamic Republic of Iran will face a 25% tariff on every trade with the United States. This order is final and decisive." However, no official document has been issued by the White House detailing the policy, its legal basis, or its scope.
Despite being a member of OPEC, Iran has been under U.S. sanctions for years. A large portion of its oil exports goes to China, while Turkey, Iraq, the United Arab Emirates, and India are also key trading partners.
China's embassy in Washington criticized Trump’s stance, stating that it would take necessary measures to protect its interests and opposed unilateral sanctions. They argued that there are no winners in tariff wars and trade conflicts.
Russian economist Dr. Boris Kopikin stated that the new U.S. tariffs would have no impact on Russia, as its trade with the U.S. is negligible. Japan and South Korea have stated that they are closely monitoring the situation and will respond appropriately once the details of U.S. actions become clear.
The new order could affect India, which is already subjected to a 50% tariff on its exports to the U.S. This includes a 25% reciprocal tariff, as well as a penalty of 25% due to India’s purchase of crude oil from Russia. Trump recently indicated that countries continuing trade with Russia could face tariffs as high as 500%. With the new 25% tariff, the total tariff on Indian exports to the U.S. could rise to 75%.
However, the Federation of Indian Export Organizations (FIEO) stated that Trump's new tariff announcement will not significantly affect countries doing business with Iran. In the 2024-25 financial year, India exported goods worth $1.24 billion to Iran, while importing $440 million worth of goods from Iran. The total bilateral trade between the two countries amounts to $1.68 billion. According to the Indian Embassy’s website in Tehran, India exports rice, tea, sugar, medicines, man-made staple fiber, electrical machinery, artificial jewelry, etc., to Iran. In return, India imports dry fruits, organic and inorganic chemicals, and glassware from Iran.