The low-cost shipments were previously excluded from tariffs; President Trump said the loophole has allowed countries to avoid taxes and smuggle drugs into the U.S.

In a shock move that rattled both diplomacy and markets, the US announced a sweeping 25% tariff on all Indian exports starting August 1, 2025. How did this happen? What's behind such a drastic step? And where do things go from here?

President Donald Trump said on Wednesday the United States is still negotiating with India on trade after announcing earlier in the day the U.S. will impose a 25% tariff on goods imported from the country starting on Friday.