Washington, D.C. (August 25, 2025) - Within a matter of days, goods entering the United States from India will be subject to a 50 percent ad valorem duty. These collective duties are imposed pursuant to different legal authorities, some of which are being challenged in court. This has led to significant confusion which will likely compound if court challenges persist. This Client Alert examines the applicable tariff orders and some of the critical areas of uncertainty for U.S. businesses.
Applicable Tariffs on Indian Goods
Indian goods entering the U.S. are already subject to a 25 percent ad valorem duty (the "Reciprocal Tariffs"). The Reciprocal Tariffs were first imposed via executive order on April 2, 2025 under the International Emergency Economic Powers Act of 1977 ("IEEPA"). The current 25 percent rate was imposed via an executive order on July 31, 2025. It has applied with respect to goods imported from India that entered the United States on or after August 7, 2025.
Indian goods entering the U.S. on or after August 27, 2025, however, will face an additional 25 percent ad valorem duty (the "Russian Oil Tariffs"). The Russian Oil Tariffs (also imposed under IEEPA) were imposed via an August 6, 2025 executive order, which built on Biden-era executive orders that banned imports of Russian oil into the U.S. India is the subject of the Russian Oil Tariffs because it reportedly imports Russian oil for consumption in India.
Issues for U.S. Companies
The imposition of dual-track tariffs on Indian goods has already led to considerable confusion for United States businesses for a host of reasons. First, the Trump-era tariffs generally provide limited exceptions for goods loaded onto a vessel and in transit as of the effective date, leading some businesses to believe that as long as goods are delivered to the United States by the effective date, increased tariffs will not be imposed. However, United States Customs and Border Protection ("CBP") FAQ materials state that the so-called in-transit exception applies only to goods shipped by water, not, for example, by air transport, citing applicable federal laws and regulations.
Second, U.S. businesses have faced a great deal of uncertainty resulting from court challenges to the various Trump-era tariffs. All of Trump's April 2, 2025 Reciprocal Tariffs are currently subject to federal court challenges. It is impossible to predict how those challenges will proceed but they may not invalidate all of the tariffs discussed herein in full. To read a recent Lewis Brisbois client alert on the IEEPA tariff litigation, see "Recent Updates to Trump Tariff Appeal."
Third, the applicable executive orders may not provide clarity as to the interplay between various tariffs. The Russian Oil Tariff orders explicitly state they will apply in addition to Reciprocal Tariffs, but do not explicitly state how they will apply with respect to President Trump's recent tariffs that impose 50 percent tariffs on the steel and aluminum content of hundreds of categories of goods. The Russian Oil Tariff order does appear to provide exemptions for tariffs issued under section 232 of the Trade Expansion Act of 1962, the statute under which the steel and aluminum tariffs were issued. But the language in the applicable orders is less than clear and leaves room for interpretation. To read a recent Lewis Brisbois client alert on the steel and aluminum tariffs, see "U.S. Greatly Expands Section 232 Steel and Aluminum Tariffs."
Key Takeaways
Companies importing goods from India are subject to 25 percent ad valorem duties that will double in a matter of days. There is no clear end to this ramp up in sight and proposed trade negotiations were reportedly called off. Importers can expect difficulties with import compliance, disruption of supply chains, and complications in contract negotiation and performance.
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