Trump's Tariff Plans and WHO Exit: How India's
Economy and Trade Relations Could Be Impacted
US President Donald Trump has announced plans to
overhaul the country's trade system by imposing tariffs and taxes on foreign
countries to protect American interests. His proposed tariffs include:
- A
10% tariff on global imports
- A
60% tariff on Chinese goods
- A 25% import surcharge on Canadian and Mexican products
Impact on India:
Trump has previously criticized India for imposing
high tariffs on US products, referring to the country as the "king of
tariffs." He has warned that his administration would reciprocate if India
continues to levy high duties on American goods. The potential implications for
India include:
- Increased
Costs for Indian Exporters:
- Indian
businesses that export to the US, particularly in sectors such as
textiles, pharmaceuticals, and IT services, could face higher tariffs.
- This
would make Indian products less competitive in the US market, leading to
reduced sales and revenue.
- Impact
on Trade Relations:
- The
US was India's largest trading partner in 2021-2022 and 2022-2023, with
bilateral trade surpassing USD 72 billion in early 2024.
- A
tariff war could strain this relationship and force India to seek
alternative markets.
- Potential
Inflation:
- Higher
import costs could lead to increased prices for consumers in both
countries.
- US
consumers may face higher costs for Indian products, while Indian
consumers could see price hikes on US goods.
- Diplomatic
and Policy Adjustments:
- India
might need to engage in diplomatic negotiations to secure favorable trade
terms.
- Policymakers
may have to explore alternative markets and diversify export strategies.
BRICS Currency Threat:
In December last year, Trump threatened to impose a
100% tariff on BRICS nations, including India, if they pursued a common
currency to replace the US dollar. This came after BRICS nations discussed
reducing their reliance on the dollar in trade. India's External Affairs
Minister S. Jaishankar responded cautiously, acknowledging the practicality of
using local currencies for efficiency and cost-saving reasons.
US Withdrawal from WHO:
On his first day in office, President Trump signed
an executive order to withdraw the US from the World Health Organization (WHO).
The decision cited:
- Mishandling
of the COVID-19 pandemic
- Failure
to implement necessary reforms
- Unfair
financial burdens on the US
India, as a major stakeholder in global health
initiatives, may need to recalibrate its international health strategies and
strengthen regional collaborations to address global health challenges without
US involvement.
Trump's trade policies and
geopolitical stance present challenges and opportunities for India. While
tariffs could impact India's export sector, the evolving situation necessitates
proactive economic diplomacy and strategic planning to mitigate potential
disruptions.
Indian Market is in downtrend since the news of
Donald Trump Oath ceremony and various statements given before taking the seat.
FII has been on selling spree in January 2025 they have already sold more than
57000 crores approx. $6 billion since start of this month. It is getting
predicted that selling may get intensified after new announcements by Donal
Trump.
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