Trump's New Tariffs Explained: Why India Got Lower 10% Duty While China Faces Higher Rates

Donald Trump has rewritten America's trade rulebook again. A sweeping new tariff regime is now in force. It covers imports from 60 trading partners, but here's the surprise. India has escaped with one of the lowest tariff rates. While many countries now face duties of up to 12.5%, India will pay just 10%. So what changed? And why did New Delhi get a better deal? The answer lies in America's new strategy. Earlier this year, the US Supreme Court struck down Trump's earlier reciprocal tariff program, ruling that the administration had overstepped its legal authority. The White House quickly found another path. Instead of targeting trade deficits, Washington launched investigations under Section 301 of the Trade Act. This time, the focus shifted to something very different – forced labor in global supply chains. The Trump administration argued that countries failing to block imports made using forced or coerced labor were creating an unfair advantage over American businesses. The result is a two-tier tariff system. Countries with stronger safeguards against forced labor imports qualify for a lower 10% tariff. Those with legal laws face the default rate of 12.5%. India was not always in the lower bracket. When the proposal was first unveiled in June, New Delhi was placed in the higher tariff category. But then came a crucial policy change. India amended its foreign trade policy to explicitly restrict imports produced using forced or coerced labor. At the same time, Indian officials stepped up diplomatic engagement with Washington, arguing that supply chain standards should be addressed through cooperation rather than confrontation. Those moves worked. Before the new tariff order came into force, the United States reclassified India into the lower tariff tier. The 2.5% point difference may sound small. But for exporters of textiles, pharmaceuticals, engineering goods, and auto components, it could translate into millions of dollars in savings and help preserve India's competitiveness in its larger export market. Not everyone received similar treatment. China remains in the higher tariff category, with Washington continuing to accuse Beijing of benefiting from forced labor, involving Uyghur minorities, an allegation China strongly denies. Several other economies, including Vietnam, also faced the higher rate, despite introducing fresh labor regulations. The new tariffs still exempt products such as oil, aircraft parts, fertilizers, critical minerals, and goods already covered under national security tariffs. Critics argue the policy is protectionism in a new package. The White House insists it is about human rights, fair competition, and securing cleaner global supply chains. For India, the outcome is clear. A timely policy change has delivered a valuable trade advantage, at a moment when global commerce is becoming increasingly shaped not just by economics, but by geopolitics. With Srijitha Sen Majumdar, Bureau Report, India Today Global.