India will soon drop its tariffs substantially: Trump ahead of April 2 reciprocal threat

President Donald Trump asserted on Tuesday (April 1) that India “will soon drop its tariff" rates substantially along with other American allies ahead of the April 2 deadline for reciprocal tariffs to take effect.

Speaking from the White House Oval Office, Trump dismissed concerns that reciprocal tariffs might push US allies closer to China. He expressed confidence in his strategy, citing the European Union’s recent reduction of car tariffs to 2.5 per cent as evidence of success.

Also read: Trump’s ‘Liberation Day’ of tariffs is coming; how is India gearing up for it?

Trump on tariffs

“I heard that India is going to be dropping its tariffs substantially. A lot of countries are going to drop their tariffs,” Trump gloated.

Trump, who maintains that the US has been “ripped off by every country in the world”, has repeatedly called April 2 “Liberation Day,” with promises to roll out a set of tariffs that he says will free the US from a reliance on foreign goods. To do this, Trump has said he'll impose “reciprocal” tariffs to match the duties that other countries charge on US products.

But a lot remains unknown about how these levies will actually be implemented. White House press secretary Karoline Leavitt said on Monday that Trump would unveil his plans to place reciprocal tariffs on nearly all American trading partners on Wednesday, but maintained that the details are up to the president to announce.

US details tariffs

Earlier, Leavitt highlighted several examples of what the administration considers unfair trade practices. She noted that India currently imposes 100 per cent tariffs on American agricultural products.

Also read: India’s tariff meltdown before US is beginning of a painful journey

Leavitt also spoke about the European Union’s 50 per cent tariffs on American dairy, Japan’s 700 per cent on American rice and Canada’s nearly 300 per cent on American butter and cheese.

According to her, this makes it virtually impossible for American products to be imported to these markets and has put a lot of Americans out of business and work over the past several decades.

Indian stocks hit

Meanwhile, ahead of “Liberation Day”, equity benchmark indices slumped in the Indian stock market on Tuesday.

After a weak beginning, the 30-share BSE benchmark Sensex tanked 1,233.95 points to 76,180.97 in late morning trade. The NSE Nifty dropped 321.5 points to 23,197.85.

From the Sensex pack, Bajaj Finserv, HDFC Bank, Bajaj Finance, Infosys, Axis Bank, HCL Tech, Titan, Tech Mahindra, Tata Consultancy Services and Sun Pharma were among the biggest laggards. Among the gainers, IndusInd Bank jumped nearly 5 per cent. Zomato also traded in positive territory.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading in the positive territory. US markets ended mostly higher on Monday.

Also read: India charges 150% tariff on alcohol: White House on countries ‘ripping off’ US

Analysing April 2

"Globally markets are focused on the details of Trump’s reciprocal tariffs to be announced on April 2,” said VK Vijayakumar, chief investment strategist, Geojit Investments Ltd.

“The market trends after the announcements will depend on the details of the tariffs and how they will impact different countries and sectors," he added.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,352.82 crore on Friday, according to exchange data. Indian stock markets were closed on Monday for Eid.