New Tariffs on India June 2026 | Business | Sarthak Ahuja

The US has thrown another googly on India today threatening imposition of additional tariffs of 12.5%... But the why and how of the timing is interesting...

In Feb, the US Supreme Court held that Donald Trump had overstepped his authority in imposing tariffs and a number of those tariffs are unlawful and can’t be applied...

So the US started searching for legal provisions that could allow it to impose tariffs...

An agency called the US Trade Representative was told to start a fresh investigation under Section 301 of the US Trade Act 1974 to find flaws in trade practices of 60 countries around the world...

Out of these 60, about 54 countries have been flagged for an alleged problem - forced labour...

That because India engages in forced labour of maybe children or people who are not qualified to work in factories, or the practices are against human rights... that means we can impose tariffs of up to 12.5% on them...

But the interesting part is - they don’t say India directly engages in forced labour... but the fact that it has not been able to control or adequately enforce measures to stop forced labour in its supply chain, including in its imports...

Which essentially means, if any raw materials are coming from other countries like China, Vietnam, Indonesia... then we have not been able to control such material which may have been produced using forced labour...

So this legal ground is being prepared in the US to bring in tariffs on countries...

Secondly, the timing is super interesting, because currently, a US trade negotation is being held in India... and such announcements are almost like nudges or threats to get the deal in their own favour...

If this comes through, we can see an impact of 10-12% on margins of companies in Garments, Textile, Chemicals, Electronics, Engineering Goods...

So how would India respond?

India says that it complies with ILO convention on labour, has very active labour laws, and if the World Trade Organization exists for governing laws of trades between countries, why is the US unilaterally using its own laws to threaten other nations...

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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years

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