File Image – US President Donald Trump and Indian Prime Minister Narendra Modi arrive to hold a joint press conference in the East Room of the White House in Washington, DC, on February 13, 2025.
US President Donald Trump’s 50 per cent tariffs on Indian exports officially came into force earlier today. The move, meant to punish India for continuing to buy Russian crude oil, has instantly doubled duties on a wide range of Indian goods entering the US. But while the White House is projecting this as a show of strength, experts say American families and businesses will end up paying the heaviest price. From higher grocery bills to costlier cars and job losses, the tariffs threaten to act as a self-inflicted wound on the US economy.
How Trump’s tariffs will hurt American households
A Yale University report released in July warns that Trump’s sweeping tariff regime will drive up costs for everyday essentials. On average, each US household will lose about $2,400 a year because of higher prices. For low-income families, the burden will be especially painful. Researchers estimate they could lose $1,300 annually, nearly three times the proportional impact faced by wealthy households.
The study projects steep price hikes in daily-use categories. Clothing could rise by almost 40 per cent, shoes and handbags by 40 per cent, and textile goods by 19 per cent. Food costs are expected to increase by an average of 3.4 per cent, with fresh produce spiking up to 7 per cent. For families planning to buy a car, the hit will be even harder. Vehicle prices could jump 12 per cent, or nearly $6,000 extra for a new model.
Inflation and growth slowdown
Tariffs are already adding fuel to inflation, which remains above the Federal Reserve’s 2 per cent target. A report by the State Bank of India warns that the new duties on Indian goods could shave 40 to 50 basis points off US GDP growth. Combined with earlier tariffs on dozens of countries, analysts expect the American economy to lose around 0.5 percentage points of growth in 2025-26.
JP Morgan has also flagged serious risks, noting that tariffs are acting like a $1,300 tax hike per household by pushing inflation higher, cutting consumer demand, and slowing overall growth.
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Job losses and weaker supply chains
Beyond consumer pain, tariffs threaten American jobs. Yale’s report predicts up to 500,000 job losses by the end of 2025, with unemployment expected to rise by 0.3 percentage points. Many of these losses will come in import-dependent sectors such as automobiles, electronics, and consumer durables, where manufacturers rely on affordable global supply chains.
Businesses that had shifted production from China to India under the “China plus one” strategy are now stuck in limbo. With Indian imports facing the highest tariffs of any US trading partner, cost advantages are wiped out, and supply chains are left in chaos.
Why Trump’s move is seen as a lose-lose
Experts in Washington say Trump has turned what could have been a cooperative trade relationship into a damaging standoff. By imposing 50 per cent duties, he has priced Indian textiles, jewellery, and furniture out of the US market while simultaneously making life costlier for American consumers.
Nisha Biswal of The Asia Group summed it up bluntly: “The 50 per cent tariffs on India now the highest of any US trading partner will be hugely disruptive.” Another trade expert, Mark Linscott, called it a “remarkable lose-lose” that damages both sides.
The bottom line
Trump’s tariffs may score political points in Washington, but the economic reality is far less flattering. They will act as an inflation bomb inside the United States, squeezing household budgets, raising the cost of living, and threatening jobs. For all his tough talk about punishing India, the biggest losers of Trump’s 50 per cent tariffs are likely to be American workers and families.