U.S. President Trump announced a 25 percent tax [ Trump tariff ] on Indian imports From August 1. In a Truth Social post, he wrote that India has been “our friend” but has “very high tariffs on U.S. products” which are unacceptable. He also declared additional sanctions on India, specifically its energy and weaponry buys of Russian arms and energy sources. Read more recent articles like this at News.highzones.com
Back in April, Trump had already proposed a 26 percent tariff, which he held at bay during trade talks. The new rate is at 25 percent which is a small drop. Negotiations, however, have broken down.
The question is, why the Tariffs and Penalties?
According to Trump, the principal purpose of it was the high tariffs and the obnoxious non-monetary trade barriers of India. He was also against India having sustained trade with Russia saying it is propping the Moscow war in Ukraine.
At the same time, the U.S. and India continue negotiations, yet Trump also underscored that no final trade deal has been reached so far, whereas there was optimism regarding this situation previously.
Trump tariff : Impact and Response of India
India and the U.S. did not manage to agree upon a trade agreement in time when it comes to the reciprocity tariff deadline. India is still trying to bargain a better deal but uncertainty of the present situation is making the Indian businesses postpone the plans to export to the U.S.
The Indian rupee will do a plunge, and it is most probable it will trade beyond the level of 87 a dollar by the reaction of the markets to the tariff threat and the portfolio outflow. Read more recent articles like this at News.highzones.com
Looking Back: A Broader Tariff Strategy
The new tariff improves the previous more generalized plan of Trump. In April, he apportioned a 10 percent basic duty to any imports. He was also contemplating the tariffs higher in countries that had big trade deficits with the U.S. Under that structure India originally was supposed to face a rate of 26 percent.
A U.S. appeals court recently granted the tariffs to remain intact following the interrupting of a decision by a lower court that found them to be illegal. This puts pressure on India as appeals and trade negotiations are on.
So, what is going to happen?
Soon, an American team is supposed to come to New Delhi to resume talks. India believes it will strike a bilateral trade accord in September or October. There is a vested interest of India to get good terms with uncertainty of law and increased economic pressure.
Indian analysts warn that India is not to make concessions blindly: they must consider how to proceed, given the legal disputability of the legal basis of the tariffs imposed by Trump.
Trump tariff : Important Facts
Trump imposes an import tariff of 25 percent on Indian goods that begins on August 1.
There are further sanctions on India on trade in Russian weapon, and oil.
The step comes after a standoff in trade negotiations and in the geopolitical tussle with Russia.
Indian companies and currency markets respond by being cautious as they postpone business deals and anticipate volatility of the rupee. Read more recent articles like this at News.highzones.com
Disclaimer:
This article only have the intention of providing information. Any facts, quotations, and events are according to publicly accessible information at the time of writing. I have tried to be objective in the reporting of facts and to be fair, but the analyses and interpretations are my own and are not official opinion of any organization or individuals referred. It is kind advice to all the readers to do additional research and confirm the claims using reliable sources.
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