India's hopes for benefits dashed by Donald Trump's announcement of reciprocal tariffs from April 2
India's hopes for benefits dashed by Donald Trump's announcement of reciprocal tariffs from April 2
Digital Desk: US President Donald Trump again targeted India on Tuesday for its high tariffs, signaling that trade talks may not yield concessions for New Delhi on broad levies such as reciprocal tariffs, which are slated to go into force on April 2.
"India charges us 100% tariffs; the system is not and has never been fair to the United States. On April 2, reciprocal tariffs will go into effect. We will tax them as much as they tax us. If they use non-monetary tariffs to keep us out of their market, we will use non-monetary barriers to keep them out of ours," Trump stated during a joint session of the United States Congress.
Indian Prime Minister Narendra Modi's visit to the US has sparked hopes within the industry that a trade agreement with the US could help avoid broad tariffs in exchange for market access for US products in India, including bourbon whiskey.
Meanwhile, Commerce Minister Piyush Goyal is visiting the United States to meet with Jamieson Greer, the new US Trade Representative in charge of implementing Trump's tariff proposal.
Greer was a member of Trump's first government that targeted China, resulting in export potential for India in the electronic sector.
Trump chastised other countries for imposing higher taxes on the US than vice versa, describing the situation as "unfair." He also noted that other countries, including the European Union, China, Brazil, and India, impose higher taxes on the United States.
Rating agency Moody's has warned that emerging countries with large rate differentials to the US, such as India, Vietnam, and Thailand, could be the most affected by reciprocal tariffs.
India has a smaller overall exposure to the US market, but certain industries, such as food, textiles, and pharmaceuticals, face dangers. The agency also stated that targeted Asia-Pacific economies may suffer more negative pressure due to increased capital outflows and a stronger US dollar.
However, the majority of these economies have appropriate macroprudential buffers and effective monetary policy frameworks in place to mitigate external shocks. Domestic demand in most parts of the region remains strong, aided by a gradual easing of global and regional financial conditions.
