<p class="bodytext">President Donald Trump’s “Liberation Day” tariff hikes which were announced early on Thursday have rocked the world – they threaten to disrupt the world economy and trigger trade wars. Trump has declared a 10% baseline tax on imports from all countries and higher tariff rates on many countries that run trade surpluses with the US. The new regime would impose a 34% tax on imports from China, 20% on the EU, 25% on South Korea, 24% on Japan and 32% on Taiwan. At 49%, Cambodia faces the steepest tariff, followed closely by Vietnam at 46% and Sri Lanka at 44%. Trump has declared a national emergency to launch the tariffs which will immediately come into effect. He has promised a boost to the US economy and the manufacturing sector, though it is feared that the new policy would slow down the economy and increase costs and inflation.</p>.<p class="bodytext">India will face a 26% blanket tariff on all goods and services imported to the US. Trump said that though Prime Minister Narendra Modi is a good friend, India had not been treating the US “right”. He said, “India charges us 52%, so we will charge them half of that – 26%.” He described India as “very, very tough.” A range of goods and services including agricultural and food products, jewellery, electronics, textiles, automobile, and auto components may be affected by the tariff hikes, but the full impact may be known only in the coming weeks and months. There is a view that pharmaceuticals may gain because of some exemptions and textiles will benefit from the differential in tariffs between India and other major textile exporting countries. Farm exports and electronics and jewellery exports may be hit.</p>.Don't see any significant impact on Indian auto industry by US reciprocal tariff: SIAM.<p class="bodytext">The direct impact on India’s economy may not be huge because bilateral goods trade with America is around 3% of India’s GDP. There are estimates that the higher tariffs could cost 0.6 percentage point of India’s GDP growth. But there will be an indirect impact because of a reduced demand for Indian goods as a result of slower global growth and greater competition to capture new markets. India has tried to humour Trump with duty cuts on various items, and a bilateral trade deal is under negotiation. It is too early to say what the outcome of the trade talks would be. It is clear that India would not resort to retaliation and there is even hope of gaining something from the tariff mix. There will certainly be costs and losses but there could also be opportunities. Containing the damage seems to be India’s first priority.</p>
<p class="bodytext">President Donald Trump’s “Liberation Day” tariff hikes which were announced early on Thursday have rocked the world – they threaten to disrupt the world economy and trigger trade wars. Trump has declared a 10% baseline tax on imports from all countries and higher tariff rates on many countries that run trade surpluses with the US. The new regime would impose a 34% tax on imports from China, 20% on the EU, 25% on South Korea, 24% on Japan and 32% on Taiwan. At 49%, Cambodia faces the steepest tariff, followed closely by Vietnam at 46% and Sri Lanka at 44%. Trump has declared a national emergency to launch the tariffs which will immediately come into effect. He has promised a boost to the US economy and the manufacturing sector, though it is feared that the new policy would slow down the economy and increase costs and inflation.</p>.<p class="bodytext">India will face a 26% blanket tariff on all goods and services imported to the US. Trump said that though Prime Minister Narendra Modi is a good friend, India had not been treating the US “right”. He said, “India charges us 52%, so we will charge them half of that – 26%.” He described India as “very, very tough.” A range of goods and services including agricultural and food products, jewellery, electronics, textiles, automobile, and auto components may be affected by the tariff hikes, but the full impact may be known only in the coming weeks and months. There is a view that pharmaceuticals may gain because of some exemptions and textiles will benefit from the differential in tariffs between India and other major textile exporting countries. Farm exports and electronics and jewellery exports may be hit.</p>.Don't see any significant impact on Indian auto industry by US reciprocal tariff: SIAM.<p class="bodytext">The direct impact on India’s economy may not be huge because bilateral goods trade with America is around 3% of India’s GDP. There are estimates that the higher tariffs could cost 0.6 percentage point of India’s GDP growth. But there will be an indirect impact because of a reduced demand for Indian goods as a result of slower global growth and greater competition to capture new markets. India has tried to humour Trump with duty cuts on various items, and a bilateral trade deal is under negotiation. It is too early to say what the outcome of the trade talks would be. It is clear that India would not resort to retaliation and there is even hope of gaining something from the tariff mix. There will certainly be costs and losses but there could also be opportunities. Containing the damage seems to be India’s first priority.</p>
