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Trump Tariff: US President Donald Trump’s aggressive tariff policy on global trade has increased the fear of a trade war. The US has announced a massive tariff hike on products imported from China, Canada, Mexico and the European Union, leading these countries to announce that they will impose retaliatory tariffs on the US as well.
India has remained calm so far amid this global trade turmoil, but how long will this situation last? US trade policies may also affect India, especially the export of aluminium, steel, automobiles, pharmaceuticals and agricultural products.
Trump’s tariffs – impact on global trade
The current tariff on China increased from 10% to 25%.
25% tariff imposed on steel imported from Canada and Mexico.
Plan to impose 25% duty on EU products as well.
Canada took retaliatory steps and announced a 25% tariff on US products. China also warned of imposing a ban on US agricultural products. At the same time, the European Union is also preparing for trade action against the US.
Can India survive this tariff war?
In fact, India has so far been spared from Trump’s tariff attacks, but this stability cannot last for long. India’s trade balance has been comparatively less controversial with the US. India is an important market for US companies, due to which aggressive policies on trade have not been implemented. There is no major threat to India’s agricultural products and IT sector at the moment, but this may change from April 2025. Trump has announced the imposition of “reciprocal tariffs” on many countries including India. Let us tell you that Indian officials are working on several strategies to avoid US tariffs.
Discussion on tariff reduction
India is planning to reduce tariffs on automobiles, pharmaceuticals, agricultural products, chemicals and electronics. Tariffs on high-end motorcycles and bourbon whiskey have already been reduced from 50% to 30%. Discussions are on for a $500 billion trade deal between India and the US. India’s Commerce Minister Piyush Goyal is meeting US officials to speed up trade talks. India has promised to buy energy and defense equipment from the US. India is trying to strengthen cooperation with the US in the IT and services sector.
Which sectors are most at risk?
If the US increases tariffs on India, these sectors will be most affected:
- Automobile industry – The US imports many automobile parts from India.
- Chemical and metal industry – A 25% tariff may be imposed on steel and aluminum products.
- Jewellery industry – India’s diamond and gold exports may be affected.
- Pharmaceuticals – Sales of Indian medicines in the US market may be affected.
- Agricultural products – Shrimp, dairy products and other agricultural exports may be heavily affected.
How much help will India get from the tariffs imposed on Donald Trump’s dragon? PM Modi told whom to take advantage
The imposition of high tariffs on imports from China, Mexico and Canada by the US is expected to provide new opportunities to Indian exports, especially in areas like agriculture, engineering, machine tools, garments, clothing, chemicals and leather. At the same time, Prime Minister Narendra Modi on Tuesday (March 04, 2005) called upon the Indian industry to take ‘big steps’ to take advantage of global opportunities at a time when the world is looking at India as a reliable partner.
He said that the government will launch two missions to promote manufacturing and exports. Addressing a post-budget webinar on regulatory, investment and ease of doing business reforms, Modi asked the industry to identify new products that can be manufactured in the country and meet global demand.
What did PM Modi say to the industry?
Modi told the industry, “Our country is capable of doing this, all of you (industry) are capable, this is a huge opportunity for us. I want our industry not to just look at these expectations of the world as spectators. We cannot remain spectators, you have to find your role in this, you have to find opportunities for yourself.” The Prime Minister also stressed the need to develop new ways of loan distribution to ensure timely and low-cost access to funds to more than six crore micro, small and medium units across the country. He said that five lakh women, Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs starting enterprises for the first time will be given loans up to Rs 2 crore. ‘Industry is full of confidence due to reforms from the government’ The Prime Minister said, “Today India is the engine of growth for the global economy. India has proved its fighting ability even in difficult times. Today every country wants to strengthen its economic partnership with India. Our manufacturing sector should take advantage of this partnership.” The Prime Minister further said that the industry has got new confidence due to the continuity of the government and confidence in reforms.
PM Modi said, “I want to assure the stakeholders of the manufacturing and export sector that this will continue in the coming years. I urge you to move forward with confidence and take big steps. New avenues are open for the manufacturing and export sector of the country.” The Prime Minister said that MSMEs need not only loans but also guidance. He suggested that industries should start guidance programs to support them.
He said that stable policy and better business environment are important for the progress of any country. He said that the government has eliminated more than 40,000 compliances at the central and state level and is working on the Jan Vishwas 2.0 Bill. PM Modi said, “We are working on the Jan Vishwas 2.0 Bill. We have decided to set up a committee to review the rules of the non-financial sector. Our effort is to make them modern, strong, people-friendly and trust-based.” ‘Identify global products that can be made in India’
He said the government would launch two missions to boost manufacturing and exports. The Prime Minister said the focus should be on better technology and quality products. He urged all stakeholders to identify new products in demand globally that can be made in India. He encouraged stakeholders to strategically approach countries with export potential.
The Prime Minister said, “The world is currently facing political uncertainty and the whole world is looking at India as a growth hub.” He said that during the COVID pandemic crisis, when the global economy slowed down, India accelerated global growth.
PM Modi said the definition of MSMEs has been further expanded in the budget for the next financial year (2025-26) to instill confidence in them in sustained growth. This will create more employment opportunities for the youth. However, the biggest problem faced by MSMEs was the difficulty in getting loans. He said that 10 years ago, MSMEs had received loans worth about Rs 12 lakh crore, which has now increased to about Rs 30 lakh crore.
