The Trump administration is preparing to act as its temporary 10% global tariff, imposed after the US Supreme Court struck down part of the president’s earlier tariff regime, is due to expire on July 24.

The duty currently applies to most goods entering the US from trading partners, including India, and officials are weighing what form the next set of measures should take.

One possibility is that the 10% rate is replaced by new tariffs under separate trade powers rather than being extended unchanged.

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A cloud gathers over India’s trade horizon

For India, the expiry matters because Washington already has two separate trade investigations open against New Delhi under Section 301 of the US Trade Act of 1974.

One of them concerns alleged forced-labor violations, and in early June the US Trade Representative’s office proposed an additional 12.5% tariff on Indian imports on that ground.

India has rejected that finding, while the second probe, into excess manufacturing capacity, is still pending.

If both investigations are converted into duties, Indian exporters could face a much steeper effective tariff burden than the temporary 10% levy now in place.

A handshake delayed, not discarded

A senior US official told Reuters on Wednesday that a long-negotiated US-India trade agreement could still be signed within the next three to four months.

“The deal… is there. We literally have the paper,” the official said, adding that the remaining delay stems from the completion of US Section 301 investigations.

The same official said one probe covering 60 countries was expected to conclude this week or next and that Washington has already proposed new tariffs of up to 12.5% on dozens of nations, including India, over allegations tied to goods made with forced labor.

The remarks suggest the talks are far advanced but also that tariff decisions remain the main obstacle to a final agreement.

The final card has yet to be played

The pressure on India intensified after New Delhi had prohibited imports of goods produced using forced labor, a move the trade ministry said could help avert fresh US action.

The notification empowers the central government to ban such imports and says India’s foreign trade body will investigate suspect goods before recommending a prohibition.

That step came against the backdrop of the approaching July 24 expiration. The US could let goods revert to ordinary tariff levels, extend the 10% duty with congressional approval, replace it with Section 301 tariffs, or use another instrument altogether.

For now, Indian exporters are left waiting for the next Washington announcement, while officials on both sides continue to negotiate under the shadow of the deadline.

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FAQs

Q1: What happens after the US 10% tariff on Indian goods expires?

After July 24, the US may replace the temporary 10% tariff with new country-specific duties or other trade measures, depending on its policy decision.

Q2: Why could India face a 12.5% US tariff?

The proposed 12.5% tariff is linked to a US Section 301 investigation into alleged forced-labour concerns involving Indian imports.