Trump Tariff Highlights: Trump claims US in ‘driver’s seat’ after tariff announcements, says ‘now they will do anything for us’

The Indian rupee demonstrated resilience on Thursday, holding up relatively well despite a decline in most Asian currencies and equities following U.S. President Donald Trump’s broad implementation of reciprocal tariffs. The rupee slipped 0.16% against the US dollar, settling at 85.6375. On Wednesday, Trump announced a 10% baseline tariff on all imports starting April 5, along with higher duties on specific countries, including a 34% tariff on China and a 20% tariff on the European Union.

The share price of IT stocks slumped after Trump’s administration imposed 26% reciprocal tariffs on Indian imports to the US. The Nifty IT, a basket of Indian tech stocks, fell 2.5% to 35,371.55 levels. Meanwhile, Sun Pharmaceuticals share prices rose 5.8% to an intra-day high of Rs 1,812.70. The reason behind the surge is US not imposing reciprocal tariffs on pharmaceutical products.

Imposition of 26% reciprocal tariff on medical device exports to US may pose challenges to the sector’s growth, said Association of Indian Medical Device Industry (AiMeD) on Thursday. AiMeD Forum Coordinator Rajiv Nath emphasised that the new tariff may possibly impact Indian medical devices exports pushing the industry to explore windows of opportunities to diversify its supply chain dependence on any one nation. Read more

“As India evaluates the impact of reduced tariffs, we recognize the pharmaceutical sector as the clear winner. With India importing $800 million worth of pharmaceutical products from the U.S. and exporting $8.7 billion, the strong trade ties between the two countries create a powerful win-win scenario. This shift drives significant cost savings on life-saving medicines and also positions Indian exporters to gain a competitive edge over their Asian counterparts, further strengthening India’s leadership in the global pharmaceutical market,” said Bhavin Mukund Mehta, Vice-Chairman of Pharmexcil and Whole-Time Director of Kilitch Drugs Ltd.

EU chief Ursula von der Leyen calling them a “major blow to the world economy.” Leyen said that “the consequences will be dire for millions of people around the globe” and adds that Europe is finalising its first response package to the steel tariffs.

According to a report in Moneycontrol, the Commerce ministry sources are calling this “not a complete setback for India” as the Indian government sets up a control room to deal with Trump tariffs.

Indian goods already face a 25% tariff on steel, aluminium and auto, with the latest announcement, US had imposed a base line tariff of 10% between April 5-8 on the remaining Indian products. These tariffs are set to increase to 27% starting April 9.

Norwegian Prime Minister Jonas Gahr Stoere on Thursday said that the country will seek to negotiate with the United States regarding the tariffs imposed by US President Donald Trump.

Minister of State for Finance Pankaj Chaudhary on Thursday told PTI that India is assessing impact of reciprocal tariffs imposed by US.

These include essential and strategic items such as pharmaceuticals, semiconductors, copper, and energy products like oil, gas, coal, and LNG, according to analysis of think tank GTRI.

Q. What are tariffs?

A. These are customs or import duties imposed on the import of goods. The importer has to pay this duty to the government. Normally, companies pass on these taxes to end users.

Q. What are reciprocal tariffs?

A. They are imposed by countries to counter increases in duties or high tariffs by trading partners — a kind of tit-for-tat tax.

The Global Trade Research Initiative (GTRI) stated that this latest announcement of Trump’s tariffs on the world could present an opportunity for India to strengthen its position in global trade and manufacturing as the US has imposed higher reciprocal tariffs on several Asian countries, including China, Vietnam, Taiwan, Thailand and Bangladesh.

GTRI Founder Ajay Srivastava explained that the gains from these new tariffs will not accrue automatically as the nation will need deep reforms for enabling scale production, domestic value addition and improving competitiveness first to benefit.

GTRI also highlighted that India’s strong base in textile production, coupled with lower tariffs, could drive greater global demand and new investments in the sector. In the electronics, telecom, and smartphone sectors, countries like Vietnam and Thailand are expected to lose cost competitiveness due to the steep US tariffs, and this opens a window for India.

“One of the biggest events of the year has unfolded; the President has announced retaliatory tariffs on exports to the US. While it has been at the same level to match the rates for most countries, it has been rather kind to the US as the average rates are 26% vs almost 52% imposed by India. The US is the biggest export market for India for many sectors and commodities. This will be a big blow for Indian businesses and will end up making Indian exports expensive, less competitive in some cases. The move has already sent shockwaves to the global markets, and it may take some time to digest and discount the development,” said Nish Bhatt, Founder & CEO, Millwood Kane International on US trade tariff policy.

“Largely, the tariffs will be inflationary in nature for the US as well as its trading countries. This step may have a bearing on the FOMC’s rate decision, as it may wait to see the full impact of tariffs on inflation. For India, it is prudent to rethink, re-consider rationalizing the trade tariff structures, especially with the US. This will help reduce the tariffs on exports to the US, as it is one of the biggest export markets for India,” he added.

The Global Trade Research Initiative (GTRI) highlighted that essential and strategic items such as pharmaceuticals, semiconductors, copper and energy products like oil, gas, coal and LNG are exempted from the 27 per cent import duty announced by Donald Trump. GTRI also stated that the US’s protectionist tariff regime could act as a catalyst for India to gain from global supply chain realignments.

“If these conditions are met, India is well-positioned to become a key global manufacturing and export hub in the coming years,” GTRI Founder Ajay Srivastava said, adding “there are goods that will face zero tariffs and these include essential and strategic items such as pharmaceuticals, semiconductors, copper, and energy products like oil, gas, coal, and LNG”.

“What was anticipated has happened. The U.S. government had been saying they would return to the old regimes the U.S. dealt with over 40 years ago. No one believed it. But markets globally were actually discounting this expectation with limited gains over 6 months and booming gold prices. We are now entering a new world order, and there’s nothing wrong if other countries were having tariff barriers while U.S. did not, and is now correcting it. Markets will have to price this in, both in terms of sentiment and earnings. Volatility would continue but at some point it will result in sharp falls over a few days which may give good buying opportunities in a new economic order for high risk investors,” said Nitin Rao, CEO InCred Wealth.

EU Council President Antonio Costa said on Thursday emphasised on the need for Europe to reach free trade deals with other partners in the world amid trade tariffs imposed by the United States.

“We will engage with all our partners and continue to strengthen and expand our trade network. Now is the time to ratify the agreements with Mercosur, Mexico and decisively advance in the negotiations with India and other key partners,” Costa said in a post on X.

Vietnam’s PM Pham Minh Chinh has instructed its government to set up a task force to deal with the reciprocal tariff announced by US President Donald Trump.

“The Executive Yuan found the decision highly unreasonable and deeply regretted it, and will initiate serious negotiations with the United States,” cabinet spokeswoman Michelle Lee said, after Trump announced sweeping tariffs that included a 32 percent levy on Taiwan.

According to Donald Trump, the “reciprocal” tariffs were a response to duties and other non-tariff barriers levied on US goods. The US President highlighted that the new levies will boost manufacturing jobs at home. “For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said.

European Commission President Ursula von der Leyen has warned of countermeasures against Trump’s tariffs, stating that Europe is finalizing its first response to US steel tariffs and preparing further actions if negotiations fail. Acknowledging disappointment in the US, she urged Europe to brace for the economic impact of the tariffs.

“Tariffs unveiled by President Trump last night would bring a major realignment in global trade and manufacturing value chains. India has been placed somewhere in the middle of the tariff rates at 26 per cent in addition to 10% baseline duties, which needs to be assessed for real impact”, said ASSOCHAM President Mr Sanjay Nayar.

Amid the announcement of Trump’s traffic on China, yuan dropped to its lowest levels in seven weeks, while the stock markets slumped on April 3. Trump announced a sweeping set of reciprocal tariffs that were particularly heavy on the nation and its main trading partners. Even though the investors in China were bracing for Trump’s reciprocal tariffs, the latest punitive measures turned out to be more aggressive than expected.

China has strongly condemned US President Donald Trump’s new tariffs, with state media calling them “tariff blackmail.” The Global Times criticized the move, while the Ministry of Commerce vowed “resolute countermeasures,” arguing that tariffs harm US interests and threaten global economic stability. Additionally, China’s ambassador to the US objected to Taiwan being listed separately in the tariffs list, reaffirming Beijing’s stance that “Taiwan is China’s Taiwan” and rejecting any form of Taiwanese independence.

Following the announcement of Trump’s tariff, the Indian exporters’ body FIEO highlighted that the 27 per cent tariffs or import duties pose challenges for domestic players, however, India’s position remains comparatively more favourable than that of its competitor nations.

Federation of Indian Export Organisations (FIEO) President S C Ralhan said, “While these tariffs do present challenges, India’s position remains comparatively favourable. For instance, Vietnam faces a 46 per cent tariff, China 34 per cent, and Indonesia 32 per cent, placing India in a relatively better position than key competitors such as Vietnam, China, Indonesia, Bangladesh, Sri Lanka, and Myanmar.”

Madhavi Arora, Chief Economist, Emkay Global Financial Services on Trump’s Reciprocal Tariffs –

Macro and market implications

▪️ Trade-led US recession takes everyone down. There is no real winner – not even relative!

▪️ US recession probability rises dramatically: Persisting trade-tariff noises and policy uncertainty will be shaping things for worse – a hostile environment for investment spending.

▪️ Higher tariffs will imply some combination of lower US corporate profit margins and higher consumer prices (could go up more than 1.5% +). The journey of the US economy will flow from the recent goldilocks to stagflation in coming quarters to possibly dis/de-inflationary impulse, led by permanently lower output.

▪️ This channel could play out over a year. But over this period, Fed’s policy choices will get complicated with too many moving parts.

Near term + Medium term

(i) Amid recession fears, expect US dollar smile to make a comeback, fillip to USD given its anticyclical nature

(ii) Prep for global dirty FX wars ahead for all to survive the trade war

(iii) Near-term-rise in EM assets risk premia across the board

(iv) Changing global regime+ Higher expected inflation and growth volatility = higher rates and equity volatility

“India’s pharmaceutical sector enjoys protection from reciprocal tariffs, keeping it insulated from tariff increase. Additionally, Indian goods face significantly lower tariffs in the US compared to those from China and Vietnam (additional difference arising on account of reciprocal tariffs released being 7% and 19% less, respectively), creating possibility of growth potential for India’s telecommunication and textile manufacturing sectors. While 18% of India’s total exports are destined for the US, anticipated supply chain shifts are expected to open new export opportunities,” said Saurabh Agarwal, Tax partner, EY India.

“Although short-term export fluctuations may occur, the mid-to-long term outlook suggests possible export growth for India (contingent on final international trade negotiations with the US). To fully leverage this potential, the Indian government should expand existing Production Linked Incentive (PLI) schemes in these sectors to cover a wider range of products and extend their duration by two years, thereby bolstering domestic industries’ investment and global competitiveness,” he added.

The much awaited Trump tariff has been unveiled and US President Donald Trump has slapped a 26% reciprocal tariff on India. While India is set to analyse the tariff and issue a statement, the 10% baseline tariff is applicable on all imports from April 5 and higher duties on certain other countries including 34% on China and 46% on Vietnam. The reciprocal tariff will be effective from April 9. Read on to know four key impact of Trump Tariff on India.

US President Donald Trump’s tariffs have been met with strong opposition from both Taiwan and India. Taiwan called the 32% tariff on its goods “highly unreasonable” and announced plans for serious negotiations with Washington. Meanwhile, the White House criticised India’s trade policies, stating that its stringent testing and certification requirements make it difficult for American firms to operate in the country. In response, Trump imposed a 26% reciprocal tariff on India, arguing that India’s 52% tariff on US goods necessitates trade parity.

Brazil’s government announced it is considering bringing the case to the World Trade Organization (WTO). In a rare show of unity, Brazil’s Congress unanimously passed a reciprocity bill, granting the government authority to retaliate against any country or trade bloc that imposes tariffs on Brazilian goods.