U.S. Tariffs Update: Trump Imposes 26% Tariff on India, Global Reactions Emerge

President Trump announced a 26% “discounted reciprocal tariff” on India, marking a significant trade shift. This tariff, half of India’s existing levy, highlights ongoing trade tensions. India plans to negotiate a bilateral agreement, assessing the tariff’s impact, especially on key sectors. Global reactions indicate rising concerns about trade relations and potential economic repercussions.

On April 2, 2025, President Donald Trump unveiled a 26 percent “discounted reciprocal tariff” on India, acknowledging the country’s existing 52 percent tariffs on U.S. goods. Trump described this initiative as a significant move that would mark “Liberation Day,” signifying a rebirth of American industry and heralding a new era of wealth for the United States.

In a lengthy address in the Rose Garden, Trump criticized other nations for imposing high tariffs on American products, claiming, “For decades, our country has been looted, pillaged, raped and plundered by nations near and far… American workers have suffered gravely.” He emphasized the concept of reciprocal tariffs and pointed to specific examples illustrating significant tariff disparities between the U.S. and its trade partners.

Following the tariff announcement, Trump displayed a chart highlighting various global tariffs on U.S. goods, which reinforced his argument for reciprocity. He highlighted India’s 52 percent levy on U.S. goods while proposing a 26 percent tariff in return, emphasizing that long-standing tariff inequities needed to be addressed.

India’s response included an analysis of the tariff’s potential impact on its economy, stating, “It is a mixed bag and not a setback for India.” The Indian government plans to negotiate a bilateral trade agreement with the U.S. to address these tariffs, aiming for a resolution by fall 2025.

Experts indicated that sectors in India, particularly electronics and gems, could face substantial losses from these tariffs, while some products, like pharmaceuticals, may be exempted. Furthermore, other countries, including Thailand, expressed concern and aimed to seek alternative markets in light of the new tariffs.

In summary, President Trump’s announcement of a 26 percent tariff on India reflects ongoing tensions regarding international trade practices. While the U.S. emphasizes the need for reciprocal trade terms, India’s government remains optimistic about negotiating a favorable agreement. These tariffs potentially threaten various export sectors and risk escalating global trade conflicts. Stakeholders worldwide are closely monitoring developments in this dynamic economic landscape.

Original Source: m.economictimes.com