What Exactly Are the Increased Import Tariffs by the US ?

New Delhi – Ever since US President Donald Trump imposed trade tariffs on various countries, people have been raising many questions about these taxes. When will these tariffs come into effect in India ? How much burden will they place on the public ? And what impact will they have on the common man ? Here’s a detailed explanation.

What is an import tariff ?

An import tariff is a type of customs duty or tax imposed on imported goods, which must be paid by the importer to the government. Generally, businesses pass on this cost to consumers. In other words, the ultimate burden of the tariff falls on the common people.

What is a retaliatory tariff ?

A retaliatory tariff is imposed in response to increased or additional tariffs levied by a trading partner. In essence, it is a countermeasure — a way for a country to strike back economically.

How much tariff will India face ?

A 25% tariff is already in place on steel, aluminum, vehicles, and auto parts. For other goods, a minimum tariff of 10% will be imposed between April 5 and 8, which will then rise to as much as 26% starting April 9.

What is the US trying to achieve ?

The goal is to boost domestic production within the United States. The US has significant trade imbalances with several countries, especially China. In 2023–24, the US trade deficit with India stood at $35.31 billion.

Which sectors have been exempted ?

According to an analysis, apart from pharmaceuticals, sectors such as semiconductors, copper, oil, gas, and coal — i.e., energy-related products — have been excluded from the scope of these tariffs.

How big a challenge is this for India ?

Experts believe that India is in a better position compared to its competitors. This could be an opportunity for India to expand its role in the global supply chain. However, to seize this opportunity, India will need to improve ease of doing business and invest in infrastructure.

How beneficial will a trade agreement with the US be ?

During his visit to the U.S. in February, Prime Minister Narendra Modi announced a goal to increase bilateral trade to $500 billion by 2030. In such trade agreements, partner countries usually reduce or eliminate tariffs on most goods. Rules are also relaxed to encourage services and investments.

How much tariff has been imposed on other countries ?

The US has imposed a 54% tariff on China, 46% on Vietnam, 37% on Bangladesh, and 36% on Thailand.

Violation of WTO rules !

The increased import tariffs by the US are a clear violation of World Trade Organization (WTO) rules. Member countries have the full right to approach the WTO’s dispute resolution mechanism against such actions.