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US President Donald Trump, in a Rose Garden announcement, said he was placing elevated tariff rates on dozens of nations that run meaningful trade surpluses with the US.

LIVE: Senate rebukes Trump tariffs; China vows to retaliate as markets nosedive

India's tariff is 27 pc, not 26 pc; MoS for Finance Pankaj Chaudhary says Centre assessing impact; pharma sector exempted in big relief


India is assessing the 26 per cent tariff hike imposed by the US and its impact on the country, Minister of State for Finance Pankaj Chaudhary said on Thursday (April 3).

"For (Donald) Trump, it's America first but for (Prime Minister Narendra) Modi, it's India first. We are assessing the impact of reciprocal tariffs imposed by the US," he said on the sidelines of an event.

US President Donald Trump on Wednesday (April 2) announced far-reaching new tariffs on nearly all US trading partners — a 34 per cent tax on imports from China and 20 per cent on the European Union, among others — that threaten to dismantle much of the architecture of the global economy and trigger broader trade wars. India has got 26 per cent but key sectors such as pharmaceuticals have been spared.

Trump, in a Rose Garden announcement, said he was placing elevated tariff rates on dozens of nations that run meaningful trade surpluses with the US, while imposing a 10 per cent baseline tax on imports from all countries in response to what he called an economic emergency.


Aggressive rhetoric

The US president, who said the tariffs were designed to boost domestic manufacturing, used aggressive rhetoric to describe a global trade system that the US helped to build after World War II, saying “our country has been looted, pillaged, raped and plundered” by other nations.

The action amounts to a historic tax hike that could push the global order to a breaking point. It kickstarts what could be a painful transition for many Americans as middle-class essentials such as housing, autos and clothing are expected to become more costly, while disrupting the alliances built to ensure peace and economic stability.


Trump said he was acting to bring in hundreds of billions in new revenue to the US government and restore fairness to global trade.

National economic emergency

“Taxpayers have been ripped off for more than 50 years,” he said. “But it is not going to happen anymore.” Trump declared a national economic emergency to levy the tariffs. He has promised that factory jobs will return to the US as a result of the taxes, but his policies risk a sudden economic slowdown as consumers and businesses could face sharp price hikes.

Trump was fulfilling a key campaign promise as he imposed what he called “reciprocal” tariffs on trade partners, acting without Congress under the 1977 International Emergency Powers Act. But his action Wednesday could jeopardise Trump's voter mandate in last year's election to combat inflation.

Several Republican senators, particularly from farm and border states, have questioned the wisdom of the tariffs. US stock market futures sold off sharply overnight in anticipation of the economy weakening, after having already dropped since the start of this year.

Great Depression fears

“With today's announcement, US tariffs will approach levels not seen since the Smoot-Hawley Tariff Act of 1930, which incited a global trade war and deepened the Great Depression," said Scott Lincicome and Colin Grabow of the Cato Institute, a libertarian think tank.

The president's higher rates would hit foreign entities that sell more goods to the US than they buy. The administration essentially calculated its tariff rates to raise revenues equal in size to the trade imbalances with those nations. Trump then halved that rate in act that he described as “very kind.”

The White House says the tariffs and other trade imbalances led to a $1.2 trillion imbalance last year. Administration officials suggested it could take an extended set of actions by other countries to bring down the new tariffs their imports now face, and retaliatory tariffs by those countries could make the situation worse.

Olu Sonola, head of US economic research at Fitch Ratings, said the average tariff rate charged by the US would increase to roughly 22 per cent from 2.5 per cent in 2024.

“Many countries will likely end up in a recession," Sonola said. "You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time.”

Canada, Mexico 'spared'

The new tariffs will come on top of recent announcements of 25 per cent taxes on auto imports; levies against China, Canada and Mexico; and expanded trade penalties on steel and aluminum. Trump has also imposed tariffs on countries that import oil from Venezuela and he plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips.

Canada and Mexico would not face higher rates on what they're already being charged by Trump in what he says is an effort to stop illegal immigration and drug smuggling. As of now, goods that comply with the USMCA North American trade pact would be excluded from those tariffs.

But the 20 per cent charged on imports from China due to its role in fentanyl production would largely be added to the 34 per cent announced by Trump. The specific products that Trump is tariffing, such as autos, would be exempt from the tariffs unveiled Wednesday, as would products such as pharmaceutical drugs that he plans to tariff at a later date.

Threats of backlash

None of the warning signs about a falling stock market or consumer sentiment turning morose have caused the administration to publicly second-guess its strategy, despite the risk of political backlash.

Senior administration officials, who insisted on anonymity to preview the new tariffs with reporters ahead of Trump's speech, said the taxes would raise hundreds of billions of dollars annually in revenues. They said the 10 per cent baseline rate existed to help ensure compliance, while the higher rates were based on the trade deficits run with other nations and then halved to reach the numbers that Trump presented in the Rose Garden.

The 10 per cent rate would be collected starting Saturday and the higher rates would be collected beginning April 9.

Trump removed the tariff exemptions on imports from China worth $800 or less. He plans to remove the exemptions other nations have on imports worth $800 or less once the federal government certifies that is has the staffing and resources in place.

What think tanks say

Based on the possibility of broad tariffs that have been floated by some White House aides, most outside analyses by banks and think tanks see an economy tarnished by higher prices and stagnating growth.

Trump would be applying these tariffs on his own; he has ways of doing so without congressional approval. That makes it easy for Democratic lawmakers and policymakers to criticise the administration if the uncertainty expressed by businesses and declining consumer sentiment are signs of trouble to come.

Many allies feel they have been reluctantly drawn into a confrontation by Trump, who routinely says America's friends and foes have essentially ripped off the US with a mix of tariffs and other trade barriers.

The flip side is that Americans also have the incomes to choose to buy designer gowns by French fashion houses and autos from German manufacturers, whereas World Bank data show the EU has lower incomes per capita than the US.

Beijing warns of countermeasures

China has said it will resolutely adopt countermeasures against the 34 per cent tariffs imposed on over USD 438 billion Chinese imports to America, which is China’s third largest export market. China firmly opposes the US’s “reciprocal tariffs” and will resolutely adopt countermeasures to safeguard its rights and interests, a spokesperson for the Ministry of Commerce said.

Canadian Prime Minister Mark Carney said Trump's new tariffs would “fundamentally change the international trading system." He noted that the tariffs already in place against his country and those Trump says he plans to add will be fought with countermeasures.

“In a crisis, it's important to come together and it's essential to act with purpose and with force and that's what we will do,” Carney said.

Italy's conservative Premier Giorgia Meloni said Trump's new tariffs against the EU were “wrong” and Italy would work towards an agreement with the United States to avoid a trade war that would weaken all involved.

European Commission President Ursula von der Leyen said it was a major blow to the world economy and the consequences “will be dire for millions of people." Groceries, transport and medicines will cost more, she said, “And this is hurting, in particular, the most vulnerable citizens.”

Von der Leyen acknowledged that the world trading system has “serious deficiencies” and said the EU was ready to negotiate with the US but also was prepared to respond with countermeasures.

With agency inputs

Live Updates

  • 3 April 2025 8:25 AM GMT

    Indian auto parts makers with plants in Canada, Mexico face no significant impact of US tariffs

    Indian auto component makers having manufacturing facilities in Canada and Mexico will face no significant impact of US President Donald Trump's latest tariff war as the two countries have been exempted from additional duties.

    Due to the existing order under the International Emergency Economic Powers Act (IEEPA) related to fentanyl and migration, the White House confirmed that the new tariffs announced on Wednesday will not apply to Canada and Mexico.

    Subsequently, US-Mexico-Canada Agreement (USMCA) compliant goods from both the countries will attract zero duty while non-compliant items will face a 25 per cent tariff.

    Indian auto component makers such as Samvardhana Motherson International Ltd have already stated that with a significant part of their products being USMCA-compliant, Trump's orders may not have any material impact.

    "A significant part of the products supplied by the company and/or its subsidiaries to its various customers in the US are either manufactured in the US or are USMCA compliant and therefore as per our present assessment the said Executive Orders may not have any material impact on the financials of the company," Samvardhana Motherson International Ltd had said in a regulatory filing last month after Trump's order on March 26.

    The company had, however, acknowledged that the tariffs on imported products from various countries globally, including automotive components, may be subject to modifications from time to time.

    The 'Liberation Day' tariffs announced on Wednesday do not cover autos and auto parts and steel and aluminium articles, already subject to Section 232 tariffs at 25 per cent, on March 26, 2025.

    Vehicle tariffs take effect April 3, 2025, at midnight, and the parts tariff date is pending but will be no later than May 3, 2025.

    The tariff will apply to imported passenger vehicles -- sedans, SUVs, crossovers, minivans, cargo vans -- and light trucks, as well as critical auto parts, engines, transmissions, powertrain components, and key electrical parts.

    India's auto components export to the US stood at USD 6.79 billion in FY24, while it imported 1.4 billion from the US at 15 per cent import duty.

    India's largest export items to the US are engine components, power trains and transmissions.

    As per a report by Crisil Intelligence, imports from Mexico and Canada will get preferential treatment under USMCA and remain tariff-free till a procedure is devised to apply tariffs only to the non-US components.

    "After the exit of General Motors and Ford from India, no US major had an Indian manufacturing base for exporting back to their country. Given the meagre share of India's exports of PVs and CVs to that country, the tariffs imposed would have minimal impact on original equipment manufacturers (OEMs) here," the report said.

    However, it said India's share of auto component exports to the US is significant at 28 per cent. Within this, powertrain parts, transmissions, engines, and electricals account for 40 per cent, 29 per cent, 13 per cent and 2 per cent, respectively. Cumulatively, they account for about 84 per cent of all automotive component exports from India to the US, it noted.


  • 3 April 2025 8:23 AM GMT

    India Inc sees limited impact of US tariffs, expects major realignment in global trade

    US President Donald Trump's announcement of 27 per cent reciprocal tariffs on India would bring a major realignment in global trade and manufacturing value chains, while the country's resilient economy may feel a marginal impact, industry bodies said on Thursday.

    India Inc. believes the real impact of the announcements may be gauged only after a proper assessment.

    Tariffs unveiled by President Trump last night would bring a major realignment in global trade and manufacturing value chains.

    India has been placed somewhere in the middle of the tariff rates at 27 per cent in addition to 10 per cent baseline duties, which needs to be assessed for real impact", said ASSOCHAM President Sanjay Nayar.

    ''Net-net, it appears India's export competitiveness to the US market stands far less impacted on a relative basis. Yet our industry should make concerted efforts to increase export efficiency and value addition, to mitigate impact of these tarriffs,'' he said.

    India’s robust industrial competitiveness will balance the impact of US tariffs, and GDP will see only a 0.1 per cent impact in the short term, said PHDCCI President Hemant Jain.

    However, in the medium term, as the policy takes full effect, this shortfall will be negated, he added.

    Going ahead, given India's sustained economic development and strategic importance, we expect continuing collaboration with the US through a well-negotiated bilateral trade agreement, the ASSOCHAM President said.

  • 3 April 2025 8:21 AM GMT

    China urges Trump to cancel 'unilateral tariff'

    China has urged Trump to cancel "unilateral tariff" measures and iron out differences with trading partners through dialogue. “Many trading partners have expressed strong dissatisfaction and clear opposition,” China’s commerce ministry has said.


  • 3 April 2025 8:19 AM GMT

    Auto sector tariff our principal concern: British minister

    “The impact on the automotive sector of that particular tariff is one of our principal concern," says British business minister Jonathan Reynolds as quoted by BBC. 


  • 3 April 2025 6:58 AM GMT

    Pharma stocks rally 14 pc on US tariff exemption

    Shares of Pharmaceutical companies on Thursday jumped more than 14 per cent after the US administration exempted pharmaceuticals from reciprocal tariffs.

    In the morning trade, the scrip of Gland Pharma surged 14.32 per cent to Rs 1,755 apiece, Aurobindo Pharma rallied 9.4 per cent to Rs 1,267.95 apiece, Jubilant Pharmova increased 7.5 per cent to Rs 977.75, and Lupin rose 6.95 per cent to Rs 2,009.40 on the BSE.

    Dr Reddy’s Laboratories’ shares appreciated by 6.7 per cent to Rs 1,169, Sun Pharmaceuticals climbed 5.7 per cent to Rs 1,812.40, Divis Laboratories rose 5.4 per cent to Rs 5,969, Cipla jumped 4.78 per cent to Rs 1,522.10, and Ipca Laboratories increased 4.73 per cent to Rs 1,482.25 on the exchange.

    The scrip of Glenmark Pharmaceuticals rose 4.6 per cent to Rs 1,585.60, and Torrent Pharmaceuticals appreciated by 3.4 per cent to Rs 3,320.

  • 3 April 2025 6:56 AM GMT

    US tariff may impact growth of domestic medical device industry

    Imposition of 26 per cent reciprocal tariff on medical device exports to US may pose challenges to the sector's growth, Association of Indian Medical Device Industry (AiMeD) said on Thursday.

    President Donald Trump on Wednesday announced reciprocal tariffs on about 60 countries in a historic measure to counter higher duties imposed globally on American products.

    "Historically, India has been a key supplier of cost-effective, high-quality medical devices to the US, primarily in low-value, high volume consumables categories," AiMeD Forum Coordinator Rajiv Nath said in a statement.

    The new tariff may possibly impact Indian medical devices exports, and the industry will have to explore windows of opportunities where the US has been seeking to diversify its supply chain dependence on any one nation, he added.

    In 2023-24, India's medical device exports to the US stood at USD 714.38 million, while imports from the US to India were significantly higher at USD 1,519.94 million, as per data shared by the Export Promotion Council of Medical Devices.

  • 3 April 2025 6:55 AM GMT

    Major setback for Indian gems, jewellery exports: GJEPC

    The US retaliatory tariffs are a major setback for the Indian gems and jewellery exports, apex industry body Gem and Jewellery Export Promotion Council (GJEPC) said on Thursday as it urged the government to take steps to secure the long-term interest of the sector.

    "In the long-term, we foresee a reshaping of global supply chains. In the short-run, we anticipate challenges in sustaining India's current export volume of USD 10 billion to the US market.

    "We urge the government of India to progress the Bilateral Trade Agreement between India and the US, as it would be crucial in navigating the tariff issues and securing long term interest of the sector," GJEPC added.

    The US imports USD 11.58 billion gems and jewellery from India and exports USD 5.31 billion to the latter. The total bilateral trade between the US and India in the gems and jewellery sector is USD 16.89 billion.

  • 3 April 2025 6:54 AM GMT

    IT stocks tumble 9 pc

    Shares of information technology (IT), including Infosys, Tech Mahindra, and TCS, came under heavy selling by plunging up to 9 per cent on Thursday after the US President Trump announced reciprocal tariffs on about 60 countries globally, including India.

    The move is expected to impact India’s exports to the US. However, the Trump administration has not said anything specific to the IT sector.

    On the BSE, the scrip of Persistent Systems plunged 9.2 per cent to Rs 4,828.60 apiece, Coforge declined by 6.7 per cent to Rs 7,240, KPIT Technologies decreased 6.4 per cent to Rs 1,228.30, and Tata Consultancy Services (TCS) went lower by 3.39 per cent to Rs 3,425.

    Mphasis' shares declined 4.5 per cent to Rs 2,364, Mastek by 3.5 per cent to Rs 2,111, Tech Mahindra by 3.3 per cent to Rs 1,377.25, HCL Technologies by 3.4 per cent to Rs 1,474.20.

    On the other hand, Infosys' stock slipped 3.2 per cent to Rs 1,500.35, Wipro by 3.05 per cent to Rs 255.60, and Cyient by 3 per cent to Rs 1,213 apiece on the exchange.

    Tech Mahindra, HCL Technologies, TCS and Infosys were the major laggards in the 30-share BSE Sensex firms.

    The BSE IT Index tanked 1,242.44 points or 3.49 per cent to trade at 34,399.72. The 30-share BSE Sensex declined 305.76 points or 0.40 per cent to trade at 76,311.68.

    VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said, “The worse-than-expected reciprocal tariffs announced by President Trump will have a negative impact on markets globally.”

    Vijaykumar further said the biggest concern is that this will trigger retaliatory tariffs from other countries, resulting in a full-blown trade war, impacting global trade and global growth.

    According to the market experts, IT service providers worry that the trade war initiated by the US administration will probably hurt Indian companies' appetite for their services.

  • 3 April 2025 6:51 AM GMT

    India assessing impact of tariff: MoS Finance

    Minister of State for Finance Pankaj Chaudhary on Thursday said India is assessing tariff hike imposed by the US and its impact on the country.

    “For (Donald) Trump, it's America first but for Modi, it's India first. We are assessing the impact of reciprocal tariffs imposed by the US,” he said on the sidelines of an event.

    Asked about its impact on India, he said assessment is being done.

    The move is expected to impact India’s exports to the US. However, experts say that India is better-placed than its competitors who also face increased levies.

  • 3 April 2025 5:12 AM GMT

    China vows resolute countermeasures

    China on Thursday said it will resolutely adopt countermeasures after President Donald Trump imposed 34 per cent tariffs on over USD 438 billion Chinese imports to America, which is China’s third largest export market.

    China firmly opposes the US “reciprocal tariffs” and will resolutely adopt countermeasures to safeguard its rights and interests, a spokesperson for the Ministry of Commerce said after Trump’s announcement.

    The tariffs brought the total levies on China to 54 per cent, close to the 60 per cent Trump threatened during his poll campaign.

    Trump had earlier imposed two rounds of 10 per cent tariffs on Chinese goods, first in February and then in March this year.

    Trump earlier said he would consider lowering tariffs on China if Beijing supported a deal for ByteDance to divest its short-video app TikTok to a US buyer.

    China earlier also retaliated against Trump’s tariffs with an additional 15 per cent tariffs on American goods and initiated legal action against Washington in WTO. Additionally, China added 10 US firms to the country’s unreliable entity list and took corresponding measures against them.

    They include a number of companies linked to defence and security besides AI, aviation, IT and “dual-use” items that carry both civilian and military applications.

    Though Chinese officials argue that the new tariffs would hurt US consumers more, the new tariffs were expected to lower substantial exports to the US hitting its industries back home heavily which is already reeling under the impact of the slowdown of the Chinese economy.

    The US constitutes China’s third biggest export destination after ASEAN and the European Union. The US total goods trade with China was an estimated USD 582.4 billion in 2024, according to the figures from the Office of the US Trade Representative.

    US goods exports to China in 2024 were USD 143.5 while the US imports from China in 2024 totalled USD 438.9 billion. The US goods trade deficit with China was USD 295.4 billion in 2024.

    Responding to the tariff announcement, Liu Pengyu, spokesperson for the Chinese embassy in Washington, said: “China’s opposition to the imposition of additional tariffs has always been consistent and clear.” “China believes that protectionism leads nowhere, and trade and tariff wars have no winners,” the Post quoted Liu as saying.

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