US President Donald Trump will impose a 25% tariff rate, as well as additional undisclosed penalties, on all goods coming from India.
The verdict comes prior to the August 1 deadline by which Trump said he would finally disclose the tax rates the US would levy on each country, after several postponements to negotiate. The higher tax, which is above the baseline 10% rate, is due to India’s ties with Russia, Trump explained Wednesday on Truth Social.
“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious nonmonetary trade barriers of any country,” he stated. “Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine. India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August 1.”
The edict is a huge hit for the industry, as India is the world’s largest manufacturer, and most diamonds are cut and polished there. The US is the largest importer of polished diamonds from India. Trade bodies have been trying to arrange individual deals for the exclusion of diamonds from the increased taxes, so far with little success.
Meanwhile, on Sunday, the US agreed on a 15% tax rate on most goods from the European Union. However, the EU mentioned that certain “strategic” items would follow a zero-for-zero rate. Whether diamonds were in the tax-free category is still undetermined. The agreement is currently in principle until all 27 EU member states approve it. Until then, the 10% temporary rate remains in place. The Antwerp World Diamond Centre (AWDC) is working to get clarity on exactly which products the deal will exempt.
“There is still no official confirmation yet on which specific products may be excluded from these tariffs,” AWDC said. “We are doing everything possible to ensure this trade deal turns out as favorably as possible for Belgium’s diamond sector.”
Image: Diamond merchants in Surat, India. (Shutterstock)