The Reciprocal Tariffs Implemented by Donald Trump from April 2: Is it a Worrying Factor for India?

The reciprocal tariffs that President Donald Trump intends to implement on April 2 will apply to all countries. Earlier, it was speculated to be meant for those with the most significant trade imbalances with the US. India, China, the European Union, Mexico, Vietnam, Taiwan, Japan, South Korea, and Canada are among the nations that are expected to be impacted by Donald Trump's "Liberation Day" tariffs. On 31 March, however, White House press secretary Karoline Leavitt stated that the president will announce his intentions to apply reciprocal tariffs on all of the US' trading partners on 2 March. She went on to say that Trump alone will decide whether or not the tariffs' specifics are made public. Trump has consistently demonstrated his aggressiveness with tariff threats since taking office for a second term in January of this year.

President’s Claims Vs Reality?

The leader of the Republic has maintained that tariffs will shield American businesses from unfair competition. He further pointed out that it will also provide revenue for the federal government. He also mentioned that it will also empower the government to pressure other countries into making concessions. But according to reports, analysts have warned that imposing wide tariffs at these rates might only backfire. Tariffs have a tendency to increase prices for consumers, but companies worldwide stand to lose a great deal if their expenses rise and sales decline. Import levies have already angered the financial markets and eroded consumer confidence, as has the uncertainty surrounding future trade.

Is it Alarming for India

According to an international news agency report earlier this week, India and the US have agreed to finish a portion of a bilateral trade pact by this year. However, neither party has indicated any signs of any tariff exclusions. Days before the implementation of US President Donald Trump's reciprocal trade tariff plan, both nations held trade negotiations in New Delhi this week. Furthermore, the postponed import duties on Mexico and Canada may soon be implemented.

Indian Pharma Sector Already Raising its Eyebrows

India now levies a 10% duty on pharmaceutical imports from the US. On the other hand, the US does not impose any tariff on Indian pharmaceutical imports. According to analysts, reciprocal tariffs on imported medications will, at most, amount to 10% if they are applied to the pharmaceutical industry. Pharma corporations, according to experts, would try to pass on the tariff increases to payors. The entire supply chain will have to partially absorb the rise if the expenses are not transferred to the final patients. According to a media source, businesses that are most exposed to the US generics market will probably experience a one-time impact to their Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of between 9% and 12% if there is no pass through.