Donald Trump’s Reciprocal Tariffs: How It Will Impact India and Global Trade- wna24

Washington: US President Donald Trump on Thursday introduced a new trade policy called reciprocal tariffs, aiming to match the tax rates that other countries imposed on American goods. This announcement, made just before his meeting with Indian Prime Minister Narendra Modi, raised concerns about its impact on global trade.

“I will charge a reciprocal tariff. Any country that charges the US a tariff will receive tariffs of the same amount. No more or less. In other words, if they charge us tax or tariffs, we will charge them the exact same tax or tariffs. Very simple,” Trump told reporters.

Earlier, Trump described the day as a major one for trade policy. “Three great weeks, perhaps the best ever, but today is the big one: Reciprocal Tariffs!!! Make America Great Again!!!” he posted on Truth Social.

According to a White House official, the tariffs were set in motion through an executive action on Thursday but will not take effect immediately. This delay allows other countries time to negotiate new trade agreements with the US.

Reciprocal tariffs meant that if a country charged the US a certain tax on imports, the US would charge the same tax in return. Trump stated that India had some of the highest tariffs in the world and insisted that American businesses should not be at a disadvantage.

“If India, China, or any other country charges us a 100 or 200 percent tariff, we will do the same,” Trump said. The policy aimed to make trade “fair” for the US. The White House confirmed that the order was signed but would not take effect immediately, giving countries time to negotiate.

India and Thailand were among the countries most impacted by this decision, according to experts. Trump had previously called India a “big abuser” of tariffs, claiming that its high import taxes made it harder for US goods to enter the Indian market.

Global banks like Morgan Stanley and Nomura warned that the new tariffs could hurt India’s economy. However, countries with free trade agreements with the US, such as Mexico, Canada, and South Korea, were expected to be exempt from the new rules.

Economists warned that these tariffs could lead to higher prices for American consumers, as businesses would pass on the extra costs. Since the US imported goods worth $4.1 trillion every year, the policy could have a huge impact.

Analysts also feared that other countries might retaliate by imposing their own tariffs on US goods, leading to a global trade war. This could disrupt international markets and damage relations between the US and its allies.

Trump argued that the US had been treated unfairly in trade for many years. He said other countries benefited from American trade policies while harming US businesses. The goal of reciprocal tariffs was to force countries to lower their tariffs on US products or face equal restrictions.

While the policy was controversial, Trump and his administration believed it would bring fairness and prosperity to American workers by making global trade more balanced in favor of the US.