Modi remains unfazed with Trump tariffs tantrums, Recalibration will hurt USA more
Donald Trump has imposed a 26% tariff on imports from India as part of his so called calculations and tariff equalization. This illogical action of his will be affecting USA more as a trading partner of India.
Despite acknowledging his “great friendship” with Prime Minister Narendra Modi, Trump has justified his tariff war by claiming that India charges 52% on US imports while the US has historically charged “almost nothing” in return.
Well things will be quite clear in about 12 months time when Trump will come running to his friend fir help.
As these tariffs take effect, attention will focus on several key developments: likely reciprocal measures from India, impacts on consumer prices and supply chains within the USA, and whether the tariffs will indeed stimulate domestic manufacturing as promised.
For India specifically, there is no pressure as such to reach any trade agreement with the United States regarding these new tariffs. With the automobile tariffs already in effect and the other measures being implemented immediately, the economic consequences of Trump’s “Declaration of Economic Independence” on India will hardly be even noticeable but will soon become more apparent across global markets.
Trump’s 26% tariff on Indian imports will certainly have implications on bilateral economic relationships. However there will also be change in global trade patterns, with definite increase in China -India bilateral trade and also Indian trade with other blocs.
This will reshape manufacturing of items including consumer prices. The 26% tariff imposed on India represents one of the higher rates among major US trading partners, exceeding the 20% for the European Union and the 24% for Japan, though less than China’s 34%.
This Trump tariff on Indian goods will soon be hurting the American Consumers and they will be begging Modi for relief.
Trump’s announcement about India, already acknowledges the country as “very, very tough” and soon he will be “ tasting “ the toughness too.Of all the things Trump has been harping on motorcycle industry as a specific example of the trade imbalances Trump aims to address.
Well less than 0.00001 % of Indians even bother about this American item. of During his announcement, Trump claimed that while the United States charges only a 2.4% tariff on imported motorcycles, India imposes a 70% tariff, Thailand 60%, and Vietnam 75%.
The Trump tariffs may affect the bilateral trade between the two countries valued in the billions, these tariffs will likely increase inflation in USA and may ultimately expedite a comprehensive trade agreement between the two based on equality.
Trump’s reciprocal tariff approach has resulted in a widely varied rate structure across different countries.
According to the full list published by economic sources, the highest tariffs are directed at Vietnam (46%), Sri Lanka (44%), Myanmar (44%), Cambodia (49%), and Bangladesh (37%). Major economic powers face varying rates: China (34%), European Union (20%), Taiwan (32%), Japan (24%), South Korea (25%), and the United Kingdom (10%).
The administration’s calculations for these rates reportedly factor in not only formal tariffs but also non-monetary barriers and what Trump described as unfair practices, including currency manipulation and intellectual property theft. Trump explained that his administration assessed “total tariffs, non-monetary barriers, and other forms of unfair practices” to determine appropriate reciprocal rates.
While the full methodology behind the specific tariff calculations has not been completely transparent, Trump indicated that the rates were deliberately set lower than what could have been imposed under a strict reciprocal approach.
Trump has presented his tariff strategy as a mechanism to achieve multiple economic objectives simultaneously. He claims the tariffs will encourage companies to relocate manufacturing to the United States, create American jobs, and generate significant revenue that can be used to reduce taxes and pay down the national debt. None if this is going to happen and Trump will start realizing this sooner than later.
These announcements have already raised concerns among various stakeholders. Wall Street investors and business leaders have expressed apprehension that the levies will lead to higher costs and increased consumer prices.
Economic analysts have questioned whether the tariffs will actually achieve their stated goals or potentially trigger retaliatory measures from affected countries, potentially escalating into broader trade conflicts.
