In a surprising twist to global trade dynamics, the United States’ trade deficit with India has ballooned to $58.2 billion in 2025, up from approximately $45.7 billion the previous year. This escalation occurred even after President Donald Trump imposed steep 50% tariffs on Indian exports, according to the latest data released by the US government.
The figures paint a broader picture of America’s trade challenges. For December alone, the overall US goods and services trade deficit surged to $70.3 billion from $53 billion in November. Specifically with India, it stood at $5.2 billion that month. Over the entire year, the US recorded a massive $901.5 billion deficit, nearly matching the $903.5 billion from 2024.
Exports rose by $199.8 billion to $3,432.3 billion, while imports climbed $197.8 billion to $4,333.8 billion. Goods deficits widened sharply by $25.5 billion to $1,240.9 billion, offset somewhat by a $27.6 billion increase in services surplus to $339.5 billion.
India joins a list of major deficit partners including the European Union ($218.8 billion), China ($202.1 billion), Mexico ($196.9 billion), Vietnam ($178.2 billion), and Taiwan ($146.8 billion). These numbers underscore persistent imbalances in global supply chains.
Adding to the drama, the US Supreme Court struck down Trump’s original tariffs as unlawful. Undeterred, Trump invoked Section 122 of the Trade Act of 1974 to impose a temporary 10% tariff on imported goods for 150 days, effective February 24. This measure targets fundamental international payments issues through surcharges and restrictions.
A White House fact sheet clarifies exemptions for critical items like key minerals, metals for currency and bullion, energy products, natural resources, fertilizers, select agricultural goods, pharmaceuticals, electronics, passenger vehicles, and more. These exclusions aim to balance trade correction with economic stability.
As Washington navigates these policies, the growing deficit with India raises questions about tariff efficacy and future US-India trade relations. Economists warn that without structural reforms, deficits may continue to expand, challenging Trump’s America First agenda.