International Reach of Trump's Controversies: Aiming to Satisfy Domestic Audience
Unpredictable Global Trade Turbulence: America's Tariff Rollercoaster and Its Impact on India
America's erratic tariff practices are causing a storm worldwide, stirring uncertainty and dampening business confidence.
On March 26, the US imposed 25% tariffs on vehicles and their components. On March 31, any exemptions were scrapped. On April 2, reciprocal tariffs went into effect. On April 9, triggered by a $10 trillion carnage in global markets and a panic in the bond market, a 90-day delay was announced. Meanwhile, as China retaliated with counter-tariffs of 84%, the US upped tariffs on China to 125%, and then 145%. The US warned that any retaliation would invite retaliation of its own. Once again, on April 12, Apple was saved from a serious crisis when iPhones, iPads, and all other electronic devices were exempted from a 10% baseline tariff and reciprocal tariffs.
However, contradictions soon emerged that this rollback may not be permanent. President Donald Trump declared on his Truth Social platform that "NOBODY is getting 'off the hook' for the unfair Trade Balance, and Non-Monetary Tariff Barriers." New tariffs are likely on semiconductors and pharmaceuticals. India has opted for self-restraint and pragmatic appeasement following PM Narendra Modi's February visit to Washington, where a preliminary bilateral trade agreement (BTA) by autumn was announced.
It's uncertain whether the Trump administration will maintain silence or avoid further provocative actions on trade relations. The tariffs imposed on each country are based on a rough formula, unrelated to economic factors or existing tariff differentials.
The US endgame is unclear. Zero tariffs with every country are unrealistic. The US itself has trade surpluses in services globally, which President Trump disregards when playing the victim.
Asia's zero-tariff strategy lacks global consensus. It only works when the two economies are at similar development levels. For example, India has the capability to produce labor-intensive goods like gems and jewellery but lacks the production capacity for goods like cars. Hence, India is looking for a package deal.
The U.S. has recently implemented a series of significant tariffs in 2025, affecting various countries and sectors, with important repercussions on global trade relations, including with India. The U.S. doubled its tariff rates on imports of steel and aluminum from 25% to 50%, contributed to the highest average effective tariff rate since the late 1930s, and has imposed tariffs of over 145% on Chinese goods, though some reductions and pauses were negotiated by mid-2025.
India, as a significant trading partner, may face indirect impacts through global trade disruptions and retaliations. To navigate this more protectionist U.S. trade environment, India needs to recalibrate its trade policies and seek alternate markets or negotiations. Increased trade tensions and price impacts in the U.S. can indirectly affect India, particularly in textiles and agriculture. Retaliatory tariffs and trade barriers from other countries against the U.S. can also affect India through disrupted supply chains and shifting trade alliances, requiring India to adapt.
The unpredictable tariff practices in America's industry are causing a ripple effect, affecting not only business confidence but also sectors such as finance and politics, as global trade news illustrates. India, a significant trading partner, may face indirect impacts due to global trade disruptions resulting from these tariffs.
