US President Trump has been making US India news headlines for his trade war initiation. Donald Trump’s been raising tariffs for countries including its three major trade partners - China, Canada and Mexico. This has been significantly impacting the global crypto market. What’s new is the US India latest news - his announcement of doing the same to various other nations including India and Brazil.
His goal is to gain monetary benefits for his country to allow more job creation and economic growth.
Trump criticized the European Union (EU), Brazil, Mexico, India and others for their unfair trade policies toward the US. He’s starting reciprocal tariffs on such countries, where the US will now be charging an equal amount of tariff as imposed on the US by the particular nation. He even slammed India’s import duties in his first speech to a joint Congress session.
His imposition of US India tariffs’ main target appears to be India’s tariffs on automobile imports that are charged over 100%. The reciprocal tax is to kick in on April 2.
Trump said, “Under the Trump administration, you will pay a tariff and in some cases a rather large one. Other countries have used tariffs against us for decades and now it's our turn to start using them against those other countries.” He announced plans to do the same to nations charging high tariffs on the US.
He also said, “China's average tariff on our products is twice what we charge them. And South Korea's average tariff is four times higher. Think of that four times higher and we give so much help militarily and in so many other ways to South Korea.” As per him, the system was never fair to the US. He also mentioned choosing April 2 instead of 1 due to his superstitious nature and April Fool’s Day. He vowed to tax countries that tax them.
He further stated, “That's reciprocal, back and forth. Whatever they tax us, we will tax them. If they do non-monetary tariffs to keep us out of their market, then we will do non-monetary barriers to keep them out of our market. There's a lot of that, too. They don't even allow us in their market. We will take in trillions and trillions of dollars and create jobs like we have never seen before. I did it with China, and I did it with others. And the Biden administration couldn't do anything about it because there was so much money.”
India is vulnerable to a 25 per cent tariff on all steel and aluminium imports earlier announced by Trump which can lead to dumping of cheaper steel in India by other countries.
Officials in India are trying to lower tariffs on several imports including cars and chemicals to evade the threat. Discussions, as per reports, are on to reduce duties for automobiles, chemicals, slime agricultural products, certain medical devices and electronics as well as critical pharmaceuticals. In fact, the proposals may go further than the previous tariff reductions already unveiled by PM Narendra Modi.
The Modi-Trump summit earlier this month had tried to close the trade deal by fall. While this will take time to finalize, the officials in Delhi hope an agreement to shield India from the duties. Trade Minister Piyush Goyal even had trade talks in the US, where both nations agreed to work on the first segment of a trade deal aiming for bilateral trade worth $500 billion by 2030. He’ll discuss potential Indian concessions.
India is open to discuss tariff cuts on industrial products, including automobiles and chemicals, but is resisting pressure to lower tariffs on agricultural products, arguing it would impact millions of poor farmers, sources told Reuters. To ease trade tension, India has already cut tariffs on several items, for example, to 30% on high-end motorcycles from 50% and 100% on bourbon whiskey from 150%, while promising to review other tariffs, stepping up energy imports and buying more defence equipment.
As per analysts, chemicals, metal products, and jewellery - followed by automobiles, pharmaceuticals, and food products - are the most vulnerable sectors to potential US reciprocal tariffs. If the US expands such reciprocal tariffs to a broader range of farm products, India's agricultural and food exports, including shrimp and dairy - where tariff differentials reach nearly 40% - would be among the hardest hit.
According to India's EXIM data, India's export to the US stood at $77.52 billion for the financial year 2023-24; whereas, imports stood at $42.20 billion.
The whole issue seems to impact the global economy, inlcuding the crypto market. As per experts, India may not be directly hurt due to increased tariffs, but its economy will be adversely impacted due to global disturbances and global GDP slowdown. The Canadian government would impose tariffs on more than $100 billion of American goods over the course of 21 days, as announced by the Canadian Prime Minister Justin Trudeau against the high tariffs.
Also read: Trumps Tariff Retaliation Shakes Markets: Will Bitcoin Decline?
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