Trade And Trade-Offs For India: The Dawn Of Secondary Tariffs

In August, President Donald Trump dramatically expanded his foreign policy toolbox by imposing a 25% tariff on most imports from India—a tariff that came just shortly after a separate 25% “reciprocal tariff” was levied on India in July. Unlike many of President Trump's tariffs this year, however, the August tariffs were justified not by a trade imbalance between the United States and India, but by India's continued importation of Russian oil despite U.S. sanctions on Russia as a result of its war in Ukraine.

Putting economic pressure on one country (here, India), intending to ultimately penalize another (here, Russia), is the hallmark of so-called “secondary” sanctions, but is an unprecedented motivation for tariffs.

The legal footing for the tariffs President Trump has imposed this year remains uncertain until the Supreme Court hears argument later this year, but if the Supreme Court upholds President Trump's tariffs, this fusion of sanctions logic with tariffs may dramatically reshape both global trade and U.S. foreign policy.

Executive Order 14329 and Tariffs Based on IEEPA

On Aug. 6, 2025, President Trump issued Executive Order 14329 (“Tariff EO”), “Addressing Threats to the United States by the Government of the Russian Federation,” imposing a 25% tariff on most imports from India, to take effect on Aug. 27, 2025. President Trump had already imposed a “reciprocal tariff” on imports from India (and others) in July, see Executive Order 14326, and so the August tariffs would result in a cumulative 50% tariff on most Indian imports to the United States.

The Tariff EO exempts some categories of imports, such as goods already subject to Section 232 national security tariffs (e.g., steel, aluminum, copper), and some goods loaded onto a vessel before August 27 and in transit are exempt.

Like most of the tariffs imposed by President Trump, including the July tariffs, the August tariff is predicated on IEEPA, 50 U.S.C. §§1701 et seq. IEEPA grants the president broad powers to block property in the United States and prohibit U.S. persons from engaging in business dealings with foreign targets after declaring an “unusual and extraordinary threat…to the national security, foreign policy, or economy” of the United States. 50 U.S.C. §1701(a).

The Tariff EO builds on Executive Order 14066, issued by President Biden in March 2022, in which President Joe Biden found “that the Russian Federation's unjustified, unprovoked, unyielding, and unconscionable war against Ukraine…constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States.” To address that threat, President Biden prohibited imports of many Russian goods, such as crude oil and coal, into the United States.

In the Tariff EO, President Trump found that “the national emergency described in Executive Order 14066 continues and that the actions and policies of the Government of the Russian Federation continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States,” and that it is thus “necessary and appropriate to impose an additional [tariff] on imports of articles of India, which is directly or indirectly importing Russian Federation oil.”

This is not the first time President Trump has announced his intention to impose tariffs on countries that import Russian oil. On March 24, 2025, he issued Executive Order 14245, “Imposing Tariffs on Countries Importing Venezuelan Oil.”

EO 14245 provided that “[o]n or after April 2, 2025, a tariff of 25 percent may be imposed on all goods imported into the United States from any country that imports Venezuelan oil,” should the Secretary of State “determine in his discretion” that the tariffs should be imposed. EO 14245 relied on the national emergency under IEEPA with respect to Venezuela declared by President Barack Obama in 2015 in Executive Order 13692, which national emergency President Trump said has been “intensified” by the “activities of the Tren de Aragua gang, a transnational criminal organization originating in Venezuela.” To date, however, no such tariffs have been imposed under this authority.

Secondary Tariffs and Secondary Sanctions

President Trump has characterized the tariffs imposed by the Tariff EO as “secondary” tariffs. This is not because they are not tariffs—they are—but instead because of the analogy to secondary sanctions, which are a common tool for presidents under IEEPA.

Historically, presidents use IEEPA to impose sanctions on particular countries (such as Russia, Venezuela, or Iran) or individual entities or persons (such as terrorists or transnational criminal organizations) whose conduct they find poses a national-security risk to the United States.

Those sanctions typically block those targets' assets when those assets are located in the United States and prohibit U.S. persons from engaging in trade or business with those targets. Critically, this also freezes them out of the U.S. financial system. These types of sanctions are referred to as “primary” sanctions.

“Secondary” sanctions, by contrast, extend pressure on the sanctioned country, entity, or person by imposing consequences on foreign non-U.S. persons who deal with a sanctioned party (in the current landscape, this primarily means those who deal with Iran and North Korea).

When secondary sanctions are imposed, a non-U.S. person who deals with a sanctioned party—such as foreign banks, shipping firms, or oil purchasers that facilitate transactions with the sanctioned target—may find themselves designated for U.S. sanctions, blocked from U.S. financial transactions, denied export licenses, or facing other penalties.

Secondary sanctions ramp up the power of primary sanctions by forcing non-U.S. actors to choose between continuing to do business with the sanctioned party or preserving their own access to the United States—a stiff cost. Much of secondary sanctions' leverage comes from the dominance of the U.S. dollar, U.S. banking system, and U.S. export control regimes. In turn, the legal basis for the extraterritorial effect of secondary sanctions lies in the nexus of U.S. jurisdiction, such as the use of U.S. correspondent banking or U.S. dollar clearing.

The August tariffs on India thus operate like secondary sanctions. The rationale of the Tariff EO is not India's trade relationship directly with the United States, which was the putative basis for the July tariffs (and the reciprocal tariffs imposed on most U.S. trading partners this year). Instead, the basis is apparently that the primary sanctions the United States has imposed on Russia—as relevant here, the ban on Russian oil imports to the United States—are not doing enough to counteract “the actions and policies of the Government of the Russian Federation [which] continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.”

Just like a secondary sanction, the tariff is thus intended to disincentivize India from purchasing Russian oil—which the United States cannot, of course, directly prohibit—by subjecting India to an additional 25% tariff in the United States if it chooses to continue buying Russian oil. Thus, the “secondary tariff” is something of a hybrid—a direct trade consequence for India (the tariff) but motivated by the logic of secondary sanctions (ultimately intending to punish Russia).

India, of course, opposes these additional tariffs and decries them as coercive. And India may only be the first such target. The Tariff EO instructs the Secretaries of Commerce, State and Treasury to “determine whether any other country is directly or indirectly importing Russian Federation oil” and, if so, to “recommend whether and to what extent [President Trump] should take action as to that country, including whether [to] impose an additional [tariff] of 25 percent on imports of articles of that country.”

It also warns that “[s]hould a foreign country retaliate against the United States in response to this action,” President Trump “may modify this order to ensure the efficacy of the actions herein ordered.”

The Fate of IEEPA Tariffs

India may, however, get a reprieve from both the July and August tariffs. On August 28, 2025, the U.S. Court of Appeals for the Federal Circuit affirmed a decision by the Court of International Trade finding that IEEPA does not authorize certain of the sweeping tariffs President Trump has implemented this year. See V.O.S. Selections, Inc. v. Trump, 149 F.4th 1312 (Fed. Cir. 2025).

At issue in V.O.S. Selections were President Trump's “reciprocal tariffs”—a “baseline 10 percent [tariff] on imports from nearly every country with which the United States has any significant trade relationship”—and the “trafficking tariffs”—tariffs imposed on Canada, Mexico and China in response to “national emergency of the trafficking of opioids into the [United States] and the ostensible failure of Mexico, Canada, and China to meaningfully address this threat.” Id. at 1319-21.

The majority decision did not hold that a president can never issue tariffs under IEEPA (although four concurring judges would have so held), only that IEEPA does not authorize tariffs, like the reciprocal and tracking tariffs, “of unlimited duration on nearly all goods from nearly every country in the world.” Id. at 1318.

President Trump appealed the Federal Circuit's ruling in V.O.S. Selections and a related decision, and on September 9, 2025, the Supreme Court granted certiorari and ordered expedited briefing in the consolidated appeals. See Learning Resources, Inc. v. Trump, No. 24-1287; Trump v. V.O.S. Selections, Inc., No. 25-250.

Oral argument is set for Nov. 5. It is difficult to predict how the Supreme Court's decision will affect the secondary tariffs on India, which are not before the court. If the Court agrees with the concurring judges from the Federal Circuit and holds that IEEPA never authorizes tariffs, then secondary tariffs are surely a dead end. If the Court upholds the reciprocal and tracking tariffs, the administration may very well be able to defend its secondary tariffs against a judicial challenge.

Conclusion

The Trump administration's imposition of a 25 percent “secondary tariff” on Indian imports is a striking advancement in President Trump's tariff wars, and a significant step in the continuing mixture of trade policy with international affairs and national security.

Only time will tell whether the Supreme Court permits President Trump's use of IEEPA to implement tariffs, but the possibility of tariffs wielded alongside sanctions—already strong medicine—to further President Trump's international policy goals stands not only to send further shock waves through international markets, but also dramatically increase pressure on foreign governments who trade with targets of U.S. foreign-policy ire.

And global companies that trade in jurisdictions subject to secondary tariffs face increased pressure as well—the Department of Justice has already indicated its willingness to pursue criminal charges in cases of alleged tariff evasion, meaning more investigations and potential financial or even criminal consequences.

Companies faced with this future would be smart to tread wisely and seek experienced legal counsel proactively to ensure compliance and to minimize the risk of drastic repercussions.

This article first appeared in the October 30, 2025, edition of the “New York Law Journal” © 2025 ALM Global Properties, LLC.

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