US President Donald Trump on Wednesday unveiled a sweeping set of reciprocal tariffs targeting the country’s trading partners. Dubbed Liberation Day, the policy applies to over 180 nations without exception. Alongside country-specific levies, Trump announced a 10 per cent baseline tariff on all imports. As a result, the US economy and global markets are bracing for potential disruption as the policy aims to counter trade barriers imposed by other nations.
The new tariffs mark a significant shift from previous trade strategies and could reshape global trade flows and economic stability. With higher tariffs on key economies such as China (54 per cent), the European Union (20 per cent), and India (27 per cent), the US President has attempted to rebalance the global trade order.
A 10 per cent minimum tariff on all imports will take effect on April 5, while additional increases are scheduled for April 9. The tariffs affect sectors including pharmaceuticals, automobiles, dairy, steel, and electronics.
Trump’s confrontational trade stance is not new. In his first term, he imposed tariffs on China, prompting retaliatory duties on American exports. His tariff threats also influenced the renegotiation of the US-Mexico-Canada Agreement (USMCA) in 2020. Here’s a breakdown of the latest announcement and what it means for India and the world.
What are tariffs?
A tariff is a tax imposed by a government on goods and services imported from other countries. When these goods enter a country, importers must pay the tariff to the government. Tariffs are usually calculated as a percentage of the product’s value (ad valorem) or as a fixed amount per unit (specific). Read more
Source: Business Standard