US Tariffs Set to Resume August 1; Trade Talks with India Remain Stalled

Posted by Written by Archana Rao Reading Time: 5 minutes

US President Donald Trump has announced that several trade agreements are expected to be finalized in the coming days, while countries that have not reached a deal with the US will be formally notified of increased tariff rates by July 9. These revised tariffs are scheduled to take effect starting August 1, 2025.

India is one of the several other countries that have yet to finalize a trade deal with the US. 

As the United States (US) prepares to reinstate reciprocal tariffs, countries such as India are working against the clock to secure a trade agreement. On July 6, 2025, Trump claimed that several trade agreements are expected to be concluded in the coming days.

For countries that fail to reach a deal with the US, formal notifications outlining higher tariff rates will be issued by July 9. These revised tariffs are set to take effect on August 1, 2025.

Trump’s trade strategies have sparked global economic uncertainty, disrupted financial markets, and pushed several countries to pursue bilateral arrangements with Washington in an effort to shield their economies.

The administration had initially unveiled a base tariff rate of 10 percent in April, with additional duties of up to 50 percent on a country-wise basis. A 90-day grace period against the implementation of reciprocal tariffs was later granted to most countries—to allow time for negotiations.

READ MORE: Countdown to the End of the 90-Day Tariff Pause: Where Does India Stand Now?

US tariffs to take effect on August 1 unless trade deals are finalized

Speaking to reporters on July 6, Trump reiterated that August 1 remains the likely date for the implementation of higher tariffs. However, the exact scope of the tariff hikes remained unclear at the time. The US Commerce Secretary Howard Lutnick added that the President is currently finalizing both the specific duty rates and the associated trade agreements.

US Treasury Secretary Scott Bessent has told CNN that the rates will return to what the (US) President originally announced, indicating that the grace period is now expiring.

Trump has stated via his Truth Social platform that official tariff notification letters would begin rolling out at 12:00 p.m. Eastern Time on July 7. He stated the letters would include duty rates at the current 10 percent baseline or as extensive as 70 percent. Bessent, however, has said the US would not impose 70 percent tariff rates on major trading partners.

Washington has already secured deals with the United Kingdom (UK) and Vietnam; however, talks with major partners like India remain unresolved. It is worth noting that Britain and the US have still not reached a tariff agreement on the UK’s steel exports to the US.

Although Indian officials are hopeful about concluding a deal ahead of the July 9 deadline, New Delhi has taken an assertive position on critical matters, especially in the areas of agriculture and dairy. A key point of contention between India and the US has been the import of genetically modified (GM) agricultural products. India’s internal debate over GM feed imports is drawing scrutiny amid fears it could jeopardize its agricultural export competitiveness in sensitive markets such as the European Union (EU).

Trump warns of US tariff on nations aligning with BRICS policies

India BRICS Summit

Source: PIB Images

Trump has warned that any country supporting BRICS policies that conflict with American interests would face an additional 10 percent tariff.

Trump has consistently criticized the BRICS grouping—an acronym of Brazil, Russia, India, China, and South Africa. In February 2025, he announced a potential 100 percent tariff on BRICS nations “if they even consider” reducing reliance on the US dollar in international trade.

Meanwhile, BRICS member countries have expressed concerns about the rise of unilateral trade actions. In a joint summit declaration issued on July 7, 2025, the bloc warned that such tariffs could disrupt the global economy and impede economic recovery.

BRICS represents approximately 45 percent of the global population in 2025 and contributes over 35 percent to the world’s GDP. The alliance expanded its membership during the October 2024 Summit in Kazan, Russia, where the members officially welcomed Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). Indonesia joined in January 2025, bringing total BRICS membership to 10.

India holds firm as interim trade deal nears finalization

India and the US appear close to finalizing a mini trade agreement, with an announcement anticipated before the July 9 deadline, according to multiple media reports. The proposed deal is expected to include tariff concessions on select US agricultural exports like pecan nuts and blueberries. This is in exchange for expanded market access to the US for Indian labor-intensive goods, including textiles and leather products.

Despite intensified pressure from the US, India has maintained a firm position on the terms of the trade agreement. The Union Commerce and Industry Minister Piyush Goyal emphasized that India will continue to prioritize its national interest and will not be forced into an agreement under external deadlines.

Reports suggest that New Delhi has communicated its non-negotiable points to its US counterparts, placing the onus on Washington to conclude the talks.

GTRI warns of risks from GM feed imports

One contentious element under consideration in the trade talks is India’s potential acceptance of GM animal feed imports from the US. This proposal has raised major concerns about its impact on India’s export competitiveness, particularly in the EU.

In a statement released on July 6, the Global Trade Research Initiative (GTRI) cautioned that permitting GM feed products like soybean meal and distillers dried grains with solubles (DDGS) could compromise India’s image as a GMO-free exporter. This would particularly affect India in high-scrutiny markets such as the EU, where consumer preference strongly leans toward non-GM products.

GTRI founder Ajay Srivastava warned that even minimal GM contamination could damage India’s reputation in premium global markets. Allowing GM contamination could lead to export rejections, higher compliance costs, and reputational harm—especially in key sectors such as rice, tea, spices, honey, and organic produce.

GM crops are created by inserting genes—often from bacteria, viruses, or other species—into plant DNA to enhance traits like pest resistance or herbicide tolerance. Srivastava has made a note that while such crops are biologically plant-based and considered vegetarian, the use of animal-derived genes can raise ethical and religious concerns in India.

Although studies suggest GM DNA is broken down during digestion and does not enter animal-derived products like milk or meat, consumer advocacy groups continue to push for stricter labeling and transparency to preserve consumer choice.

India’s regulatory framework on GM imports

Addressing seed reuse, Srivastava noted that GM seeds are usually patented hybrids, restricted by legal agreements that prohibit replanting. These seeds also typically underperform when reused. In India, Bt cotton is the only GM crop approved for cultivation, and even its reuse has shown limited success.

Bt cotton in India is a GM variety of cotton that contains a gene from the soil bacterium Bacillus thuringiensis (Bt). This gene enables the cotton plant to produce a protein toxic to specific pests, particularly the bollworm, reducing the need for chemical pesticides. Bt cotton, introduced commercially in 2002, is the only GM crop approved for cultivation in India and is widely adopted across cotton-growing regions.

India maintains a conservative policy on GM imports. While GM soybean oil and canola oil are allowed, imports of GM grains, pulses, fruits, oilseeds, and animal feed products—including soybean meal and DDGS—are currently prohibited. Although field trials for some GM food crops are ongoing, no commercial approvals have been granted.

Srivastava concluded by cautioning that contamination risks exist throughout the post-harvest supply chain, including during transport, storage, and processing. This can make India’s export ecosystem vulnerable if GM imports are allowed without strict safeguards.

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