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Trump says tariffs will replace income tax, criticises Supreme Court setback in key address

Donald Trump has said tariffs collected from foreign nations could eventually replace income tax in the US, while criticising a Supreme Court ruling against his earlier import duties.

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US President Donald Trump has said that tariffs collected from foreign countries could eventually replace the modern system of income tax in the United States, arguing that such a shift would ease the financial burden on American citizens.

Speaking during his annual State of the Union address, Trump defended his sweeping tariff measures, asserting that countries which had “ripped off” the US for years were now paying billions of dollars in duties.

“As time goes by, I believe that tariffs, paid for by foreign countries, will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love,” he said.

The Republican leader credited tariffs as a key driver behind what he described as an economic turnaround. According to him, the US collected “hundreds of billions of dollars” through import duties, which he said helped secure favourable economic and national security deals.

“Countries that were ripping us off for decades are now paying us hundreds of billions of dollars,” Trump said, adding that the arrangements had resulted in growth and no inflation during that period.

Supreme Court ruling draws sharp reaction

Trump also criticised a recent 6-3 ruling by the Supreme Court of the United States that struck down his earlier sweeping import duties. He termed the verdict “very unfortunate” but maintained that most countries and corporations would continue to honour agreements already negotiated.

He said alternative legal provisions would allow his administration to retain similar tariff measures without requiring new congressional approval. “They’re a little more complex, but they’re actually probably better,” he said, referring to the legal statutes under which the revised duties would be imposed.

Hours after the ruling, Trump signed a fresh order imposing a 15 per cent tariff on imports from around the world. The new measure falls under a law that limits such duties to 150 days and is expected to take effect almost immediately.

Reciprocal tariffs and global backlash

On April 2, Trump announced “reciprocal” tariffs of up to 50 per cent on imports from countries with which the US runs trade deficits, along with a 10 per cent baseline tariff on most other nations. He invoked a 1977 law to declare the trade deficit a national emergency, which he said justified the sweeping import taxes.

Following global backlash, the administration suspended the reciprocal tariffs for 90 days to allow negotiations. According to Trump, several countries agreed to new trade terms during that period, while others faced steeper duties for not complying.

Reiterating his stance, Trump also linked tariffs to what he described as conflict resolution efforts abroad, saying the “threat of tariffs” had helped him settle disputes.

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India calls US religious freedom body biased over RSS sanctions demand

India has criticised USCIRF as biased and lacking credibility after the US body urged sanctions against RSS members ahead of Mohan Bhagwat’s New York visit.

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India has criticised the United States Commission on International Religious Freedom (USCIRF) after the US body called for sanctions against members of the Rashtriya Swayamsevak Sangh (RSS) ahead of RSS chief Mohan Bhagwat’s scheduled visit to the United States.

External Affairs Ministry spokesperson Randhir Jaiswal described USCIRF as a “biased organisation” and said it lacked credibility.

“It is a biased organisation. I would say that we should keep away from such organisations as they have their own agenda and lack any credibility,” Jaiswal said.

He also accused the body of making “disparaging and inflammatory remarks” about India and said the USCIRF was unlikely to engage with the country’s “pluralistic framework” or acknowledge the harmonious coexistence of its diverse communities.

USCIRF seeks sanctions against RSS members

USCIRF chair Asif Mahmood opposed Mohan Bhagwat’s upcoming visit to the US and called on the American government to impose sanctions against the RSS. Bhagwat is scheduled to visit New York on August 29.

The US body also urged Washington not to extend diplomatic courtesies to RSS leaders. It described the RSS as an “umbrella organisation” and alleged that its sub-groups had “perpetrated attacks on religious minorities”.

USCIRF said the US government should instead focus on imposing sanctions on RSS members found responsible for freedom of religious belief violations.

USCIRF’s earlier criticism of India

In its annual report released in March, USCIRF criticised India over alleged violations of religious freedom and recommended targeted sanctions against individuals and entities, including the RSS and Research and Analysis Wing.

The commission also recommended designating India as a “country of particular concern”.

USCIRF is an independent, bipartisan US federal government agency that makes policy recommendations to the US President, Secretary of State and Congress and tracks their implementation.

Hindu advocacy group criticises USCIRF

US-based Hindu advocacy group HinduPACT also condemned USCIRF members’ public opposition to Bhagwat’s New York visit.

Ajay Shah, founder and chair of HinduPACT, accused the commission of having “disgraced its mandate” and alleged that its chair’s remarks reflected an anti-Hindu narrative.

Shah also criticised groups including CAIR, IAMC and HfHR, alleging that they had portrayed Hindu self-assertion as extremism.

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PM Modi meets Japanese Defence Minister, pushes India-Japan security ties

PM Modi met Japanese Defence Minister Shinjiro Koizumi in New Delhi and discussed strengthening India-Japan defence and security cooperation.

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Prime Minister Narendra Modi on Thursday, August 20, met Japanese Defence Minister Shinjiro Koizumi in New Delhi and discussed ways to further strengthen defence and security cooperation between India and Japan.

During the meeting, Modi outlined his vision for strengthening the India-Japan Special Strategic and Global Partnership and highlighted the importance of closer defence and security ties in promoting peace, stability and prosperity in the Indo-Pacific and beyond.

PM Modi recalls India-Japan summit discussions

During his meeting with Koizumi, Modi recalled his detailed discussions with Japanese Prime Minister Sanae Takaichi during her visit to India for the 16th India-Japan Annual Summit in July 2026.

The prime minister also appreciated the steady momentum in defence cooperation between the two countries.

According to a statement from the Prime Minister’s Office, Koizumi, who is on an official visit to India, called on Modi on Thursday.

Focus on defence cooperation and Make in India

Modi also highlighted opportunities for Japanese companies and startups to partner with Indian firms in the defence sector.

The discussions included possibilities for co-development and co-production under the Make in India initiative, according to the statement.

Later, Modi said in a post on X that he had an “excellent conversation” with Koizumi on deepening defence and security ties between India and Japan.

He said the Special Strategic and Global Partnership between the two countries is an important anchor for peace, stability and prosperity in the Indo-Pacific and beyond.

Japan reaffirms commitment to deeper ties

Koizumi briefed Modi on the progress of bilateral defence cooperation during the meeting.

The Japanese Defence Minister also reaffirmed Japan’s continued commitment to deepening ties with India, the Prime Minister’s Office said.

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Trump warns Iran’s trading partners of economic action: India’s exports to take a hit?

Trump’s warning against countries supporting Iran could create payment, shipping and logistics challenges for Indian exporters.

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US President Donald Trump has warned countries, financial institutions and businesses against providing Iran with what he called an “economic lifeline”, saying those that continue supporting Tehran could face “TREMENDOUS” economic consequences.

Trump’s warning comes as the United States steps up economic pressure on Iran. For India, the development could have implications for exporters, particularly those shipping agricultural products, food items and pharmaceuticals to the Iranian market.

India’s trade with Iran has already declined sharply over the years. However, Indian exporters continue to maintain a trade surplus with Tehran, making the potential impact of tighter US sanctions an issue to watch.

What did Trump say about Iran?

Trump has announced what he described as the “most crushing economic operation” against Iran and said the US would pursue economic warfare and isolation against Tehran.

His warning extends beyond Iran itself. Trump said countries, financial institutions and businesses that provide Tehran with financial or commercial support could face severe consequences.

The activities cited in his warning include oil smuggling, cash transfers, currency swap lines, exchange houses, ship registries and front companies.

“This will be an ECONOMIC D-DAY, and we need all of our Allies to stand with the United States of America to isolate, and defeat, the Iran threat,” Trump said.

He also warned that countries allowing their financial institutions, businesses, airports or government entities to support Iran could face “TREMENDOUS Economic Consequences”.

How much does India trade with Iran?

India remains an important trading partner of Iran, although bilateral trade has fallen significantly from previous levels.

According to data from the Indian Embassy in Tehran cited in the report, India’s exports to Iran stood at $1.25 billion in 2025-26, while imports from Iran were around $370 million. This gave India a trade surplus of approximately $880 million.

The scale of bilateral trade is considerably smaller than it was several years ago.

In 2018-19, India-Iran trade was worth $17.03 billion. India’s imports from Iran stood at $13.53 billion that year, while exports were $3.51 billion.

By 2024-25, total bilateral trade had fallen to $1.68 billion.

This sharp decline means India’s overall economic exposure to Iran is now relatively limited compared with the size of the Indian economy. However, businesses that continue to depend on the Iranian market could still face difficulties if US sanctions and enforcement are tightened.

What does India export to Iran?

India’s trade relationship with Iran extends beyond energy.

Major Indian exports to Iran include:

  • Basmati rice
  • Tea
  • Sugar
  • Fresh fruits
  • Drugs and pharmaceuticals
  • Spices
  • Cereals and other food products

Iran also exports products including pistachios, dates, apples and kiwis to India.

Any disruption to this trade could therefore affect businesses involved in agricultural products, food items and pharmaceuticals.

Why could Trump’s warning affect Indian exporters?

The immediate risk is not necessarily that India’s entire trade with Iran will stop.

Instead, Indian exporters could face greater difficulties with payments, shipping and logistics if the US expands sanctions or increases enforcement against businesses and financial institutions dealing with Tehran.

Shipping disruptions and higher freight costs could add to the pressure. The Strait of Hormuz remains a key pressure point, while vessel rerouting, elevated freight rates and tighter container availability can increase the cost and complexity of international trade.

For exporters with direct exposure to Iran, such disruptions could make shipments more expensive and payments more complicated.

India’s exports are finding other markets

India’s broader export performance provides some cushion against a potential slowdown in trade with Iran.

India’s merchandise exports reached a record $44.24 billion in July, representing a 19.6 per cent increase from a year earlier, according to the figures cited in the report.

Engineering goods exports rose 17.7 per cent to $12.24 billion, while electronics exports jumped 57.4 per cent to around $5.9 billion.

Exports to the Middle East also increased 8.6 per cent to $5.7 billion.

India has also been expanding its trade across several other markets. In July, exports to China increased 64.57 per cent year-on-year to $2.2 billion, while shipments to Singapore rose 83.7 per cent to $1.6 billion.

Exports to the US increased 12.85 per cent to $9.02 billion.

The diversification of India’s export markets could help businesses reduce their dependence on individual markets if geopolitical tensions disrupt trade with Iran.

Will Trump’s Iran warning hurt India?

Trump’s warning could affect Indian exporters doing business with Iran through higher shipping costs, payment complications and weaker demand if economic pressure on Tehran intensifies.

The impact is likely to be more significant for businesses with direct exposure to the Iranian market than for the Indian economy as a whole.

India-Iran trade has already contracted substantially from its earlier levels. With Indian exporters increasingly accessing markets across regions including ASEAN, Africa, South Asia and North-East Asia, India may be better placed to absorb the impact of any further disruption in Iran trade.

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