New US Tariffs Spark Global Trade Tensions

US President Donald Trump has imposed sweeping new tariffs on over 60 countries, including a 25% duty on Indian goods, effective August 7, signaling a bold shift toward American protectionism. The executive order, titled 'Further Modifying The Reciprocal Tariff Rates,' targets nations with significant trade deficits with the US, with tariffs ranging from 10% for the UK to 40% for Laos and Myanmar. India’s rate, slightly reduced from an earlier 26% proposal, comes with an unspecified penalty linked to its Russian energy and arms purchases, though this was not detailed in the final order.

Trump criticized India’s high tariffs and non-tariff barriers, calling them “among the highest in the world,” and expressed frustration over its trade surplus with the US and ties with Russia, stating, “They can take their dead economies down together.” He also slammed India’s BRICS membership, labeling it anti-US.

Wendy Cutler of the Asia Society Policy Institute noted that the 25% tariff on India, a key US partner, jeopardizes hopes for a bilateral trade deal. Indian exporters face challenges, though relief is offered for goods in transit by August 7 or cleared by October 5. The Federation of Indian Export Organizations highlighted this temporary reprieve but warned of implementation hurdles for US customs.

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India’s government vowed to protect national interests, stating it is assessing the tariffs’ impact. Analysts warn of potential disruptions to India’s $87 billion export market to the US, particularly in textiles, electronics, and jewelry, with fears of reduced competitiveness against rivals like Vietnam. The move, part of Trump’s strategy to address trade imbalances, has raised concerns about global trade disruptions and economic fallout.

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