The much anticipated Donald Trump tariff has been announced, with the US President imposing a 26% reciprocal tariff on India. He called the reciprocal tariff kind, adding that the US would charge countries around half of the levies they put on Washington.
India imposes a 52% tariff on US imports, he said. “The Prime Minister just left. He’s a great friend of mine. But I said, ‘You’re a friend of mine, but you haven’t been treating us right’. They charge us 52%, but we charged them almost nothing for years and decades. It was only seven years ago when I came in,” he said following India’s Prime Minister Narendra Modi’s recent visit to the US.
The Pharma sector has reportedly been excluded from the tariffs along with semiconductors, and critical minerals.
A senior White House official told a news agency that the reciprocal tariffs, which vary from 10% to 49%, will be effective on April 9 at 12:01 a.m.
Using strong words like the US taxpayers were “being ripped off for more than 50 years”, Trump said the reciprocal tariffs were a “declaration of economic independence” for his country.
“For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense. But now it’s our turn to prosper. Tariffs are going to give us growth,” he said.
Trump also announced a minimum baseline tariff of 10% on all imports, with higher rates on countries that have the highest trade deficits with the US. According to news outlets, the 10% baseline tariff is applicable on all imports from April 5 and higher duties on certain other countries including 34% on China and 46% on Vietnam.
“If you want your tariff rate to be zero, build your products in America. Else, foreign countries will be asked to pay tariffs to access the US market,” he said. “In many cases, the friend is worse than the foe in terms of trade. Trade deficits are no longer merely an economic problem. They are a national emergency. We are finally putting American first,” he added.
He also announced a 25% tariff on automobiles not assembled in the US with effect from April 3. The move may lead to price increases for vehicles outside the US.
Trump’s imposition of reciprocal tariffs will result in increased import levies on select Indian exports. Markets are restless as a result, with traders concerned about how this could affect industries that rely heavily on exports. However, according to an SBI research analysis, India won’t be severely impacted. It claims that reciprocal tariffs will have no effect on India’s expanding manufacturing and service exports and that US tariffs may only result in a 3-3.5% drop in exports.
