US President Donald Trump’s reciprocal tariffs will take effect on April 2, impacting global trade partners like India, China, the EU, and Mexico. The new tariffs, aimed at addressing trade imbalances, could disrupt key industries such as pharmaceuticals, automobiles, and machinery.
US President Donald Trump’s much-anticipated reciprocal tariffs, aimed at addressing trade imbalances, will take effect on April 2. These tariffs, which will target all countries, are expected to affect trade partners such as India, China, the European Union, and Mexico. Trump’s new measures are a departure from previous plans to focus only on select nations, raising concerns among global trading partners.
According to an analysis by S&P, India, South Korea, and Thailand are likely to feel the brunt of these tariffs. India, in particular, faces an average tariff of 9.5 per cent on US exports, and key sectors like pharmaceuticals, gems, and automobiles could see significant price hikes. The US exports account for just 2.3 per cent of India’s GDP, but the imposition of tariffs could cost India up to USD 7 billion annually.
China and the European Union to face stricter trade measures
China, with its long-standing trade disputes with the US, is also likely to bear the brunt of Trump’s tariffs. China’s exports to the US are already subject to high duties, and the situation may worsen with new tariffs. Similarly, the European Union, a key trading partner of the US, is expected to face tariffs on cars, agricultural products, and machinery as Trump seeks to narrow the trade deficit with the bloc.
The impact on Mexico and Canada: Growing tensions
Mexico and Canada, two of the US’s closest trade partners, will also face tariffs as part of the new policy. Both countries have expressed strong objections, with Mexico preparing retaliatory tariffs. The new measures could strain diplomatic relations and impact existing trade agreements like the USMCA.
What are reciprocal tariffs?
Reciprocal tariffs are a trade strategy in which one country imposes duties on imports in response to tariffs imposed by another country. This aims to balance trade and protect domestic industries. As countries like India, China, and the EU prepare for the imposition of these tariffs, the global economic landscape may see significant shifts in the coming months.
Global trade fallout: Will countries retaliate?
As the US pushes forward with its tariff policies, countries across the globe are weighing their options. Some have already indicated they will respond with their own trade barriers, making the international trade environment even more uncertain. With the world’s largest economies grappling with these new tariffs, the global economy could face a turbulent year ahead.
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