Quick read: Trump's tariffs

US President Donald Trump has announced wide-ranging reciprocal tariffs that are set to disrupt global trade in ways not seen in half-a-century.

Details of Tariffs Announced by Donald Trump

• General Tariff Policy:

  • President Donald Trump announced sweeping "reciprocal tariffs" on imports from multiple countries during his "Liberation Day" address.

  • A baseline tariff of at least 10% was applied to all goods entering the U.S., with higher rates for specific countries and sectors.

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Tariffs on India

• Tariff Rate: A 26% tariff was imposed on all Indian goods entering the U.S.

• Reasoning: Trump claimed India imposed high tariffs on U.S. goods (up to 52%) and described the move as a step to "level the playing field".

• Sectors Affected:

  • Key industries such as automobiles, pharmaceuticals, IT services, textiles, engineering goods, and gems & jewelry are expected to be hit hardest.

  • The tariff adds to an earlier 25% levy on foreign-made automobiles, further affecting India's auto exports.

• Economic Impact:

  • Indian exporters face reduced competitiveness in the U.S. market, leading to a potential decline in export revenues.

  • Companies like Tata Motors and Sona Comstar already reported stock declines following the announcement.

  • India may consider reducing tariffs on $23 billion worth of U.S. imports to mitigate the impact, but no agreement has been finalized.

    
    

Tariffs on China

• Tariff Rate: A massive 54% tariff was imposed on all Chinese imports, combining a new 34% levy with earlier tariffs of 20%.

• Scope:

  • The tariffs target nearly all of China’s $525 billion in exports to the U.S.

• Economic Impact:

  • Expected to severely hurt Chinese exports, potentially decimating trade volumes with the U.S.

  • China condemned the move and pledged retaliatory measures, escalating trade tensions between the two largest global economies.

• Chinese Response:

  • China criticized the tariffs as unilateral and pledged countermeasures to protect its interests.

  • Some Chinese manufacturers have relocated operations to other Asian countries, but these nations also face high tariffs (e.g., Vietnam at 46%, Cambodia at 49%).

Broader Impacts

• The tariffs are part of Trump’s strategy to reduce trade deficits and protect American industries.

• Other affected regions include:

  • European Union: 20% tariff.

  • United Kingdom: 10% tariff.

  • Japan: 24% tariff.

• The policy is expected to disrupt global trade patterns, spark retaliatory measures, and potentially lead to economic uncertainty worldwide