Reciprocal Tariffs:  Will india be the most affected..?

A new executive order signed by US President trump has implemented the policy of imposing reciprocal tariffs. According to this policy, the US will impose the same amount of tax on the imports of goods from the country to which the US exports, the same amount of tax that the country imposes on American goods. This new policy is expected to have a major impact on global trade. It especially targets high-tax countries like India.
According to the new executive order signed by trump, he has instructed to conduct country-by-country studies of which countries impose tariffs on American goods and what types of trade restrictions they have imposed. This study will be carried out jointly by the office of the US Trade Representative and other government agencies.
The important thing is that when donald trump signed this order, he said in an interview with Reuters that "India has the highest tariffs of any country in the world." It is not clear how this policy will affect trade relations with India. However, the order was signed a few hours before the meeting with prime minister Modi and he talked about the tariffs. According to World Trade Organization data, India's average tariff rate is 17%, while the US's is about 3.3%, Reuters reported. In terms of trade weight, India's tariff rate is around 12%, while the US's is 2.2%. Due to this difference, it is believed that the trump administration's reciprocal tax policy will affect india more.

India currently provides subsidies to various sectors, including the Production Linked Incentive Scheme (PLI) and agriculture. If the US's reciprocal tax policy is implemented, these schemes and subsidies may be affected. As a result, the impact on the trade relationship between india and the US is likely to increase. This new approach by the US will emerge as a major challenge in the international trade environment. It remains to be seen how countries like india will face this challenge.
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Sowmiya Sriram

14/02/2025 01:39 PM