The long and short of Trump new tariff threat: US Prez vows duty on rice after US lobby raises stink over basmati

The TOI correspondent from Washington: Spurred on by the American rice lobby, which has taken a beating at the hands of aromatic Asian grains like basmati and Thai jasmine in recent years, US President Donald Trump on Monday warned of new tariffs on Indian rice exports, escalating an already tense trade war with New Delhi.

The trigger for Trump’s latest tariff tantrum was provided by Meryl Kennedy, CEO of Louisiana-based Kennedy Rice Mill and a prominent voice in the rice industry, who urged the President to “double down” and target imports from India, Thailand, and Vietnam, claiming these nations "cheat" through heavy subsidies that erode US prices.


"You want more (tariffs)?" Trump asked before pledging swift action, potentially hiking duties on Indian rice, mainly basmati, which is already subjected to 53 per cent tax under the new punitive tariffs on imports from India. The US President’s eagerness to punish New Delhi came despite an immediate clarification from Treasury Secretary Scott Bessent that Indian rice is already being tariffed.

TRUMP: Scott, tell me about India. Why is India allowed to do that? They have pay tariffs. Do they have an exemption on rice?

BESSENT: No sir. We're still working on their trade deal

TRUMP: They shouldn't be dumping. Give me the countries if you could. Mark it down, Scott.

The move opens a fresh front in the US-India trade war, blending protectionism with longstanding grievances over agricultural subsidies, while highlighting the unique allure of India's basmati rice and America's attempts to replicate it.

Central to the feud is basmati's irreplaceable charm. The long-grain aromatic rice, native to the Indo-Gangetic plains, derives its magic from 2-acetyl-1-pyrroline, yielding a nutty aroma, fluffy texture, and dramatic post-cooking elongation. Ideal for biryani and pulao, it fetches double the price of standard rice and holds geographical indication (GI) status, tying its essence to specific soil, climate, and heritage. "True basmati can't be replicated elsewhere," asserts Monica Chawla of LT Foods, India's leading US exporter via brands like Royal and Daawat.

Undeterred, US firms have long pursued "knock-offs" to curb imports. Texas-based RiceTec "pioneered" hybrids like Texmati – a US long-grain crossed with basmati – and Jasmati, mimicking Thai jasmine. Also under siege are Japanese rice varieties such as Akitakomachi and Koshihikari, supplanted by California-grown varieties like Tamaki Gold.

Proponents praise innovation for higher yields, but critics, some of whom derisively call it "industrial grade rice," slam misleading labels like “Indian-style basmati” (for a variety called “Kasmati”) as "cultural appropriation.” While the hybrids lack basmati’s authentic aroma and elongation, purists, many from the Indian sub-continent, Middle-East, and East and Southeast Asia, prefer imports for traditional dishes, leading to a huge market for Asian aromatics in the US.

As it is, Trump has given Pakistan a leg up in this field. While US duties on Indian rice hit 50% plus in August, tariff on rice on Pakistan, which has also appropriated basmati, is only 19% giving it a competitive advantage. Thailand too has a 19% tariff, giving its jasmine advantage over Indian grains. In fact, Thailand leads US imports at $832 million.

At stake now is India's position as the world's top rice producer and exporter, churning out 150 million tonnes annually and commanding 29% of global trade. US imports from India totaled $392 million in 2025, mostly premium basmati for ethnic markets – a modest 3% of India's overall exports but vital for American consumers craving South Asian flavors.

Trump’s "dumping" charge alleges India’s Minimum Support Price (MSP) system, part of its Public Distribution System (PDS), over-subsidises farmers, leading to surplus exports at below-market prices. In 2024-2025, India reported $7.55 billion in support, or 15.2% of production value. However, US estimates, using WTO methodology, claim it's 78-94%, breaching India's 10% de minimis cap for developing nations.

This has fueled a WTO dispute simmering since 2018. The US, backed by allies including Australia, Canada, and Ukraine, has lodged counter-notifications challenging India's subsidies and its invocation of the 2013 Bali Peace Clause – a safeguard for food security programs. Key milestones include 2022 consultations on exported subsidised stocks and a 2025 push for a formal panel, with the US Congress citing $500 million in annual losses to American farmers. No binding ruling exists yet, amid the WTO's dysfunctional Appellate Body since 2019. India counters that its programs are essential for feeding 1.4 billion people, disputes the calculations, and notes it notifies support levels annually using a procurement-based formula.

Yet, the irony is stark: While lambasting India, the US itself lavishly subsidises its farmers. Trump's $12 billion aid package, unveiled at the same White House event where the US rice lobby unloaded on India, includes up to $11 billion in direct payments for row crops like rice, with the remainder for specialties. US farm support totals billions annually through farm bills, countering low prices and trade fallout – precisely the "distortions" Washington accuses Delhi of.


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