Donald Trump’s reciprocal tarifs Have rled the world. Global markets are Reeling from the shock and even experts are unsure about how exactly it will play out. On April 2, 2025, The US President Announced ‘Discounted’ Tariffs on Major Economies, Calling them out for What He Sees as’ Unfair ‘Unfair’ Trade PRACTICES That Disadvantage Economy.
What has been followed is a global stock market rout, including in the US and India, as investors run for covers fearing a global economic slowdown and a posesible Us Recession. Stagflation – a period of high inflation amidst Stagnating Economic Growth or Even Contraction – is being predicted. Trump on his part seems firm on his decision, and has even said that the us economy needs this ‘medicine’ for long term gains.
India is adopting a cautious approach to the issue, and the government is actively working on the US-India Trade Deal which was announced during PM NARENDRA MODI’s Us Visit Earlier. The 26% tariff on India is higher than what experts had anticipated, but the number is less compared to other counts.
April 9, 2025 is the date when the new reciprocal tariffs come into effect. Globally Experts Have Questioned America’s Methodology in Coming Up with the Numbers for tariffs and even his supporters beLieve IT’s bad Math.
So how unfair are trump’s tariffs and what should India do to counter their Effect on the Indian Economy? Experts weight in:
How Unfair Are Donald Trump’s Tarifs?
As per the chart displayed by donald trump, India’s tariff and trade barriers Amount to 52%, China’s is 67%and Europe Union’s is 39%. According to an ap report, these numbers on which trump’s administration has been calculated the recipe the recipes are very than the actual. According to the report, World Trade Organizations Put India’s Average Tarifs at 12%, that of China at 3%and Eu’s at 2.7%.
While The Trump Administration has said that their methodology including the impact of factors Numbers, The AP Report Says.
Also read | Stock Market Crash: What’s the Road Ahead for Sensex, Nifty? Top 5 Reasons Investors Shouldn’T Panic About Short-Term ‘Noise’ Due to Trump Tarifs
What the White House Says it has done is estimate the size of a count. The resulting number has been divided by half to Arrive at the reciprocal tariff number.
The data below shows the weighted average tariff rate of counts that face the highest reciprocal tarif rates.
It’s evidence that weighted average tariffs applied by countries The average tariff imposed by the likes of myanmar, vietnam and laos is lower than the tariff imposed by the us.
Billionaire Bill Ackman, A Donald Trump Supporter, have also questioned the methodology for tariff rate calculation. “The formula used by the administration to calculate tarifs made other nations Advisors to do these calculations so he can determine policy. Course correction before the president makes a big mistake based on bad math, “He shared on x (Formerly Twitter).
What should India do?
The Trump Administration has Till Now Shown No Inclination to Blink on the implementation of the reciprocal tariffs. They have howyver, shown openness to Negotiate with Countries, and India is Alredy Working on a Trade Deal with the Us.
So if no immignant relife on tariffs is on the horizon, what should the world do? What should India do to counter the impact of Trump’s reciprocal tarifs?
The us announced a 26% reciprocal tax on India, which is more than two and a half times of the existing average tariff gap, Says DBS Bank.
Also read | Donald Trump’s Reciprocal Tariffs Send Global Shockwaves, but India may be among least vulnerable – explained in charts
“The method behind the flurry of tariff measures announced by the us on April 2 is simple – the more a nation is reliab Country Can See Tariff Relief in the Future is by Buying More from or Selling Less to the Us. Providing Meaningful Relief. The PlayBook for Most Asian Economies Oough to be to the Us While Pushing for Greater Integration with the rest of the world Economist at DBS Bank in a Recent Report.
DK Srivastava, Chief Policy Advisor, Ey India Says that India May Find It Easier to Reduce Its Reciprocal Tariff Rate By Increasing Its Imports from the Us.
“Calculations indicate that If India Increases its imports from the us by 15% as compared to the 2023-24 Level of us $ 87.4 billing whoever holding Indian Exports to the us at the Same At the Same Level of Us Level of 133.1 Billion, the reciprocal tariff rate will go down to 16.2%, a fall of near 10%points from the first applicable rate of 26%, “He Tells Toi.
“This is what India should focus on. India’s competitor counts may not find it easy to increase their imports from the US or reduce his expenses to the us. In fact, many Countermeasures by increasing their important rates
Also read | How MUCH WILL Indian Economy Be Hit by Trump Tarifs? Government Officials Mantain GDP Growth Projections
“India Should Calibrate its Policy, AIMED At Reducing The Reciprocal Tariff Rate in Each Successive Round of Revision. Increasing India’s Trade with the Us Through As Through Work to India’s Advantage, “He Adds.
Madan sabnavis, chief economist at bank of baroda says that with the current mindset of making everything in america, Indian companys can leverage this options by setting up facility by setting Diversify their business.
India’s Comparative Advantage Explained
Interestingly, while India has been slapped with 26% tarifs, the number is comparatively less less when it comes to other Major World Economies. This in turn can work in India’s favorite.
“India’s Overall Comparative Disadvantage is MUCH LESS Than that of its competitor counters since its overal dependence on expenses on experts is related to lesss. The share of Indian ‘ Services in gdp is relatively low at about 22% and that of Goods Exports is only about 13% considering the average During 2021-22 to 2023-24. GDP Growth Would Thus Be Rather Limited, “Says Ey’s DK Srivastava.
He notes the following:
- In the case of textils, significant competition come from Countries like Vietnam, Bangladesh, Sri Lanka, and Cambodia which will suffer an hon larger tarif destinage at 46%, 37%, 44%, 44%, 44%, 44%and 44% Respatively.
- In the case of electronic goods, close competition Respective tariff rates at 34%, 20%, 24%and 25%.
Radhika Rao of DBS Bank is of the View that India Retains Comparative Advantage in Specific Sector LIKE Electronics Manufacturing for now as key competitor countesses factor tarifs.
Madan sabnavis says that the 26% tariff on India is lower than that of other emerging markets that we competed with. “This would be an advantage to the expert that we can scale up and substitute expenses from these countes. Besides, there are dialogues going on between india and the usa on a beilate basis on a bilateral base Lessen the overall impact, “He Tells Toi.
(Tagstotranslate) Business News (T) Us tariff impact on India
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