US Businesses Face Crisis as Trump Tariffs Trigger Order Cancellations

The recent imposition of tariffs by the Trump administration has sent shockwaves through both American and Indian businesses. A new 25% penalty on imports from India, effective from August 7, 2025, has led to the cancellation or postponement of orders worth billions, raising concerns over potential layoffs across various sectors.

The tariffs target a range of goods, including arms and crude oil purchased from Russia. According to reports, US businesses are particularly anxious about additional tariffs set to take effect on August 27, 2025. This uncertainty has prompted discussions among Indian exporters and their American counterparts regarding the future of their trade relationships.

“After 25 percent tariffs, we will have to pay 15 percent import duty, but the burden will become unbearable when the 50 percent tariff rate kicks in,” said the CEO of an Indian garment firm that exports apparel worth Rs 600 crore annually. He expressed concern that his products are easily replaceable by those from other countries, which could jeopardize the livelihoods of over 8,000 workers at his company.

Impact on Marine Exports

The ripple effects of the tariffs are evident in India’s marine export sector as well. Thomas Jose, the owner of a Kerala-based export firm that has been shipping lobsters to the US for three generations, reported a wave of cancellations from buyers following the tariff announcement. Jose, whose business exports goods valued at Rs 900 crore per year, stated that clients indicated that any import duty exceeding 25% would be unsustainable for their operations.

India’s marine exports to the US exceed Rs 25,000 crore annually, highlighting the significant economic stakes involved. The potential for reduced shipments threatens the livelihoods of many in the fishing and export industries.

Challenges for Textiles and Jewelry

The textile and jewelry industries in India are also bracing for hard times. Vijay Kumar Mangukiya, Managing Director of Dhani Jewels, a Surat-based jewelry exporter, noted that his US clients are seeking to negotiate diamond prices to mitigate the effects of the new tariffs. He remarked, “Price negotiations are possible till the tariff rate is 25 percent, but will become impossible at 50 percent tariffs.” If no agreement can be reached, the cancellation of orders may become unavoidable.

The textile sector, which exports approximately Rs 87,525 crore to the US each year, faces similar challenges. One CEO of an Indian textile export firm recounted a conversation with an American client who demanded that the exporter absorb the increased costs. When the CEO refused, the buyer threatened to shift their orders to Bangladesh, underscoring the competitive pressures at play.

The imposition of these tariffs marks a significant turning point in US-India trade relations. As businesses on both sides of the ocean grapple with the implications, the potential for job losses and economic instability looms large. The upcoming months will likely be critical as companies adapt to the new trade landscape.