×

Trump imposes 25% tariff on nations doing business with Iran. What it means for India

Some of Tehran’s most important commercial partners include China, Iraq, the UAE, Turkey and India

US President Donald Trump | AP

For latest news and analyses on Middle East, visit: Yello! Middle East

US President Donald Trump has sharply escalated economic and military pressure on Iran by announcing a 25 per cent tariff on any country that has commercial ties with Tehran. The move, unveiled through a post on Truth Social yesterday, was described by Trump as “effective immediately” and “final and conclusive”, and applies to the imports of any nation found to be doing business with Iran. It marks one of the most sweeping trade threats issued by the United States in recent years and comes at a moment when Iran is facing its gravest internal turmoil since the 1979 revolution.

The tariff is designed to economically isolate Iran by compelling its trading partners to choose between access to the Iranian market and continued entry to the US economy. Although the White House initially offered no precise definition of what constitutes “doing business” with Iran, the policy would directly affect some of Tehran’s most important commercial partners, including China, Iraq, the United Arab Emirates, Turkey and India. The 25 per cent duty would be imposed on top of any existing US tariffs already applied to these countries, dramatically raising the cost of their exports to the United States and signalling Washington’s readiness to use trade as a coercive geopolitical tool.

The announcement also comes as the US Supreme Court is preparing to rule on the legality of Trump’s earlier, expansive use of tariffs, many of which were justified under the International Emergency Economic Powers Act. It remains uncertain whether this new Iran-related tariff rests on the same legal foundation or whether it could face similar judicial scrutiny. 

This escalation in pressure coincides with rapidly escalating protests in Iran after a sharp fall in the value of the Iranian rial and a surge in inflation. The state’s response has been described by witnesses and human rights groups as a ferocious and often deadly crackdown. Iranian authorities imposed a near-total internet and mobile phone blackout in an effort to stem the flow of information, but reports of violence have continued to emerge. The US-based Human Rights Activists News Agency has verified the deaths of at least 572 people, including 503 protesters and 69 members of the security forces. Other organisations, such as the Norway-based Iran Human Rights group, estimate that the toll could be as high as 648, with more than 10,600 people arrested nationwide.

Despite the communications blackout, disturbing visual evidence has surfaced. A geolocated video verified by NBC News showed dozens of bodies sealed in black bags scattered outside a forensic medical centre near Tehran, offering a rare and grim glimpse of the scale of the violence. 

Apart from tariffs, the Trump administration has also been mulling military action. White House Press Secretary Karoline Leavitt said that while diplomacy remained the preferred option, the President was “unafraid to use lethal force” and that airstrikes were still “on the table”. Trump himself issued a blunt warning to Iran’s leadership, declaring, “You’d better not start shooting, because we’ll start shooting too,” and insisting that the US military was “locked and loaded”.

At the same time, Trump claimed that Iranian officials had reached out to him to explore a negotiated resolution. He suggested that a meeting might be in the works but added that the United States “may have to act” before any talks take place if the violence against protesters continues. 

Iran’s response so far has a combination of defiance and guarded openness. Foreign Minister Abbas Araghchi insisted that the situation was under “total control” and accused the United States and Israel of fomenting unrest as a pretext for intervention. In the same breath, he said Iran was “ready for war but also for dialogue”. Other officials were less conciliatory. Parliament Speaker Mohammad Baqer Qalibaf warned that any US attack would make American bases, ships and what he called “occupied territories”, a reference to Israel, legitimate targets for retaliation.

International reaction has been swift. United Nations Secretary-General António Guterres said he was shocked by reports of excessive use of force and urged Iranian authorities to exercise “maximum restraint”. The crackdown has also ensnared foreign nationals, including a British couple, Craig and Lindsay Foreman, who are reportedly being held in an Iranian prison, a development their family says crosses a “red line”.

The convergence of a punitive 25 per cent tariff on Iran’s trading partners and explicit threats of US military action represents a renewed “maximum pressure” strategy aimed at halting the regime’s violence against its own citizens. As Iran’s currency continues to slide and the death toll rises, the country and the wider region remain poised on a knife-edge, with the risk of further escalation growing by the day.