Impact of Trump’s Tariffs: China and India Face Substantial Duties
Trump’s new tariffs took effect targeting 86 countries, notably imposing a 104% tariff on China and 26% on India. Countries like Lesotho and Cambodia also face severe duties. India is developing mitigation strategies and engaging in trade negotiations, while global markets reacted negatively to the tariff rollout. Trump remains optimistic about the U.S. economy.
On Wednesday, at 9:30 AM IST, President Donald Trump’s latest tariffs officially commenced, affecting exports from 86 nations under a policy termed “reciprocal tariffs.” These measures primarily target countries reported to have significant trade surpluses with the United States. The initial baseline rate of 10 percent was introduced over the previous weekend, with many nations facing substantially higher tariffs ranging from 11 to 84 percent.
China is the most severely affected, facing an overwhelming total tariff burden of 104 percent on its exports to the US. This figure results from a cumulative imposition, including a 20 percent duty, an additional 34 percent announced recently, and a last-minute 50 percent hike authorized by President Trump. In response, the Chinese Commerce Ministry declared, “The US threat to escalate tariffs on China is a mistake on top of a mistake… China will never accept it… China will fight to the end.”
India, meanwhile, has incurred a 26 percent tariff on its exports despite some key products, such as semiconductors, copper, and pharmaceuticals being exempt. Major sectors like auto parts, gems, and jewelry, however, are expected to suffer due to these tariffs. The Trump administration has indicated the potential for future tariffs on pharmaceutical imports, an area where India plays a crucial role, providing nearly 50 percent of generic medicines for the US market.
In light of this development, the Indian government is actively engaging with exporters and formulating a mitigation strategy. A meeting among Union Cabinet officials is planned to evaluate the implications and iron out protective measures for India’s trade interests. Although considering the adverse effects, India is currently not pursuing immediate counter-tariffs and instead aims to advance the ongoing trade negotiations, particularly focusing on the US-India Bilateral Trade Agreement (BTA) discussed during Prime Minister Modi’s Washington visit.
After China, other countries facing the steepest tariffs include Lesotho at 50 percent, Cambodia at 49 percent, Laos at 48 percent, Vietnam at 46 percent, Madagascar at 47 percent, Taiwan at 32 percent, South Korea at 25 percent, Japan at 24 percent, and the European Union at 20 percent. The global stock markets reacted unfavorably to the tariffs, with the US indices recording losses for the fourth consecutive day and Asian markets opening lower. Notably, South Korea’s Kospi index has entered bear market territory. Despite these economic concerns, President Trump maintained a defiant stance, stating, “America is going to be very rich again very soon.”
In conclusion, the recent tariffs imposed by the Trump administration have significant implications for global trade, with China facing the steepest burdens and India adjusting to considerable tariffs. These measures are being met with strategic responses from affected countries, particularly India, which is focusing on ongoing negotiations and considering possible exemptions. The economic repercussions are already visible in the stock markets, highlighting the broader impact of these trade policies.
Original Source: www.business-standard.com
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