"Tariff is the most beautiful word in the dictionary," US President Donald Trump said a day after his inauguration in January. Nearly three months later, he put it into action as he announced import duties varying from 10%-49% on 180 nations in his most sweeping tariff announcement to date. There was no reprieve for India, whom Trump has called a "big abuser" of trade ties, as it will face an import duty of 26%.
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The sweeping reciprocal tariffs expectedly rattled global stock markets amid concerns that it would spark a wider trade war. China, which has been dubbed "worst offender" and faces a steep 34% tariff, has already vowed to take resolute countermeasures.
Calling the move a "declaration of economic independence", Trump, in an hour-long speech, said, "For decades America had been looted, pillaged and raped by its trading partners... In many cases, the friend is worse than the foe."
DONALD TRUMP ANNOUNCES RECIPROCAL TARIFFS
Donald Trump announced sweeping tariffs of 10% to 49% on all goods imported from abroad, with around 60 nations, whom the President called "worst offenders" facing the maximum brunt. These tariffs could generate $600 billion annually for the US.
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Among the worst hit are China, whose imports will face a 34% duty, Vietnam (46%), Taiwan (32%), and the European Union (20%). China has urged the US to "immediately revoke" the unilateral tariff measures, failing which it would take "resolute countermeasures".
India will face a 26% "discounted" reciprocal tariff, Trump announced even as he called Prime Minister Narendra Modi a "great friend". The eccentric President said India charged a massive 52% duty on US imports.
However, India has reasons to cheer as pharmaceuticals have been exempt. Indian pharma firms account for 45% of generics used in the US. A government official called Trump's tariffs a "mixed bag" and not a setback.
To soften the blow, India may slash tariffs on $23 billion worth of US imports, including jewellery, pharmaceuticals, and auto parts. India has already lowered tariffs on Bourbon whiskey, Harley-Davidson motorcycles and other US products.
The White House said Russia, Cuba, Belarus, North Korea were exempted because they are already facing extremely high tariffs due to sanctions. Interestingly, Ukraine has been hit with a 10% tariff.
The tariffs roiled the stock market, with Sensex in the red in early trade. The rupee also fell by 26 paise to stand at 85.78 against the US dollar. In Asia, major stock indexes fell in morning trade. The Nikkei in Tokyo is also down.
So, how will it impact the US? In the short term, it will mean higher prices for consumers. Economists fear that it could kick off a recession, with other countries likely to counter with taxes on US exports.
Published By:
Abhishek De
Published On:
Apr 3, 2025
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