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

Vinod Nair, Head of Research, Geojit Investments Limited said, “Despite mixed global cues surrounding the impending US tariffs, the domestic market experienced steady gains. This optimism was largely driven by expectations that the tariffs would have a minimal impact on the domestic economy, given the positive progress in India-US trade negotiations. Sentiments were further reinforced by India’s manufacturing PMI for March, which reached an eight-month high, hinting at a recovery in Q4FY25 corporate earnings.”

Indian equity markets closed Wednesday’s trade on a positive note ahead of US President Donald Trump’s reciprocal tariffs. According to market experts, the optimism was on the back of expectations that the tariffs are likely to have a minimal impact. The NSE Nifty 50 jumped 165 points or 0.71% to settle at 23,330.90, while the BSE Sensex advanced 587.58 points or 0.77% to finish at 76,612.09.

Ahead of Trump’s ‘reciprocal tariffs,’ China has tightened restrictions on local companies investing in the US, a move that could strengthen Beijing’s position in potential trade negotiations with the Trump administration, Bloomberg reports.

Sources say multiple branches of China’s top economic planning agency, the National Development and Reform Commission, have recently been directed to delay registration and approval for firms seeking to invest in the US. The individuals, who requested anonymity due to the sensitivity of the matter, indicated that the restrictions align with Beijing’s broader strategy amid escalating trade tensions.

Trump tariffs worries: Which Indian stocks could feel the heat?

On Wednesday, the Indian rupee weakened as markets awaited the announcement of US reciprocal tariffs, which could escalate global trade tensions and impact economic growth. The rupee closed at 85.4975 against the US dollar, slightly down from 85.47 in the previous session.

Trump’s ‘reciprocal tariffs’ will impact India’s processed food, sugar, and cocoa exports, which face a 24.99% tariff gap. In 2024, these exports totaled $1.03 billion. Additionally, cereals, vegetables, fruits, and spices, with $1.91 billion in shipments, face a tariff differential of 5.72%.

Trump tariff to come into effect soon: Here’s what has unfolded till now and what can be expected

Donald Trump’s planned tariffs will be negative across the world, with the damage depending on how far they go, how long they last and whether they lead to successful negotiations, European Central Bank head Christine Lagarde said on Wednesday.

“It will be negative the world over and the density and the durability of the impact will vary depending on the scope, on the products targeted, on how long it lasts, on whether or not there are negotiations,” Lagarde said.

According to the Global Trade Research Initiative (GTRI), the agriculture industry—particularly fish, meat, and processed seafood—would bear the brunt of Trump’s ‘reciprocal tariff,’ with $2.58 billion in exports in 2024 facing a 27.83% tariff differential.

Trade experts warn that US-imposed reciprocal tariffs could significantly impact key Indian export sectors, including agriculture, precious stones, chemicals, pharmaceuticals, medical devices, electricals, and machinery.

According to Madhavi Arora, Chief Economist at Emkay Global Financial Services, India could lose up to $6–7 billion in exports to the United States if ‘reciprocal tariffs’ are implemented, resulting in a dip of 0.1% to 0.2% in India’s GDP.

Donald Trump’s new tariff plan has the ocean shipping industry on edge as the ‘reciprocal tariffs’ are expected to curtail transport demand and send companies scrambling to manage the fallout.

Major global container shipping firms like MSC, Maersk, CMA CGM and Hapag-Lloyd transport towering piles of colourful boxes stuffed with goods for US customers like Walmart, Target and Home Depot . They are giants in the roughly $14 trillion a year ocean shipping industry that handles about 80% of global trade. These companies are also reliant on companies that are getting whipsawed by Trump’s escalating, on-and-off tariffs.

As investors awaited further details on US President Donald Trump’s tariff plans, gold prices remained steady on Wednesday after reaching a record high in the previous session. As of 08:27 GMT, spot gold rose 0.6% to $3,128.41 per ounce, while US gold futures climbed 0.4% to $3,159.10.

Amid rising economic and geopolitical uncertainties, bullion continues to be a favored safe-haven asset. Spot gold prices are now trading over $400 higher than their levels before Trump took office in January, having reached an all-time high of $3,148.88 on Tuesday.

Trump’s reciprocal tariffs could have a significant impact on India, especially in sectors like apparel and gems/jewelry, which are highly vulnerable. However, industries such as automobiles, pharmaceuticals, and electronics may experience less impact than initially feared.​

Read More Here: Trump’s reciprocal tariff announcement soon: What are India’s options

The head of Italy’s national industry association, Confindustria, has warned that US tariffs could have a significant impact on Italian companies, a Reuters report said. He called for Europe to negotiate with President Donald Trump to prevent further escalation. Confindustria is working on a report that will analyse how the tariffs will affect Italy’s economy. The sectors most at risk include pharmaceuticals, fashion, food industries, and machinery production, which rely heavily on exports. The Confindustria leader also said that if Europe continues to clash with the US, China might benefit from the situation, the report further added.

Congress MP Randeep Surjewala on Wednesday criticised Donald Trump’s reciprocal tariffs, labeling them as the “biggest challenge” faced by independent India under the current NDA government. He expressed concern over America’s ultimatum to reduce tariffs on agricultural imports, particularly wheat and maize, fearing negative impact of the same on Indian farmers. Surjewala said that PM Modi should show conviction in defending India’s interests against the US.

China President Xi Jinping and European Union leaders will be visiting Vietnam in the upcoming weeks amid growing risks from Trump’s trade tariffs, Reuters reported officials as saying.

India’s exports to the United States could lose $3.1 billion because of new tariffs that will be announced by President Donald Trump, according to a CareEdge Ratings report. ​ This loss represents about 0.1% of India’s GDP. Smita Rajpurkar, Director at CareEdge Ratings, highlighted potential risks such as reduced exports, weakened investment and consumer confidence, and currency fluctuations. ​

The report also notes that if a global trade war begins, it could lead to further economic turbulence, which will impact India’s financial stability.

– 10% tariff was imposed on Chinese imports in February, with additional 10% imposed in March. Beijing had responded to the tariffs with a 15% levy on US coal and liquefied natural gas, a 10% tariff on American crude oil, and up to 15% tariffs on key agricultural exports.

– 25% tariffs on steel and aluminium imports were imposed on March 12 and the exemptions were removed.

– While some auto tariffs were delayed, a 10% tariff on Canada’s energy products still remain. Canada had introduced countermeasures totalling billions of dollars, but Mexico is yet to impose any new levies.

Trump has said that beginning April 2, the United States will implement uniform tariffs on all imports, without any exceptions. This move is expected to significantly impact global trade dynamics, the Guardian said. As the situation develops, companies and consumers are advised to stay informed about the potential impacts of these new trade policies.

Thailand says it will lower its trade surplus with the United States by importing more American energy and food products. This strategy comes as officials warn that U.S. tariffs could lead to export losses of approximately $7 to $8 billion. ​

Chinese newspaper, the People’s Daily, published an article enlisting the impact of US tariffs on American farmers and tech companies. The piece, written under ‘Zhong Sheng’ (which means Voice of China) is often used to express China’s foreign policy views. John Gong, a former consultant to China’s Commerce Ministry, told Bloomberg that this article appears to be China’s final attempt to prevent President Trump’s tariffs.

Research from the Institute for Public Policy Research (IPPR) has suggested that Trump’s proposed tariffs on car imports could jeopardise 25,000 jobs in the UK’s automotive sector and severely disrupt the car manufacturing industry.​ Although a comprehensive trade agreement before President Trump’s tariff announcement seems unlikely, UK negotiators are reportedly focusing on technology-related aspects in their discussions.

White House Press Secretary Karoline Leavitt on Tuesday criticised several countries for their high tariffs on US products. She also slammed India for imposing a 100% tariff on American agricultural goods and a 150% tariff on American alcohol. Leavitt also pointed out that Canada applies nearly a 300% tariff on American cheese and butter, while Japan imposes a 700% tariff on American rice. She further reiterated that Trump is looking for fair and balanced trade practices.

Although US President Donald Trump told the media that he had “settled” on a tariff plan, White House advisers continued to present him with options on the same, hours before his self-imposed deadline, a CNN report said. The options included customising tariff rates for countries, while exempting others, or imposing a flat rate as high as 20% on all imports. A White House official mentioned that a final decision was not expected until shortly before the announcement scheduled for 4 pm Washington time on Wednesday in White House’s Rose Garden. ​

A former trade official from President Trump’s first term told Reuters that the US government may impose comprehensive tariff rates on different countries at somewhat lower levels than previously discussed. This approach would affect more countries than the approximately 15 that Treasury Secretary Scott Bessent had earlier identified as primary targets due to their significant trade surpluses with the US.​ Secretary Bessent has indicated that these reciprocal tariffs would represent the maximum US tariff levels that countries will face. He noted that these rates could decrease if the affected countries meet the administration’s demands.​

Senate Democratic leader Chuck Schumer of New York on Tuesday called Trump’s tariffs a “failed strategy”. He claimed that tariffs have been a revenue-raising measure for Trump to generate funds that are necessary to extend income tax cuts that favour millionaires and billionaires. “Almost everything they do, including tariffs, it seems to me, is aimed at getting those tax cuts for the wealthy,” Schumer said on the Senate floor.

Donald Trump has called tariffs a “beautiful word” suggesting that they can help build American economy, build jobs, raising public revenue and act as a bargaining chips for extracting concessions from different countries. During his address to Congress in early March, Trump had said that these tariffs are about “protecting the very soul” of America. “Tariffs are about making America rich again and making America great again,” he had said.

Ahead of Trump’s tariff announcement, the Indian rupee has opened 22 paise lower today. The local currency opened at 85.68 against the US dollar, reported PTI.

– The EU has already announced that they would impose retaliatory tariffs on American goods, which would target sectors like steel, aluminum, and agricultural products. EU leaders have also expressed concerns about a potential trade war and its impact on global inflation.

– Polish Prime Minister Donald Tusk said there is a need to avoid unnecessary tariff conflicts. ​While UK Foreign Secretary David Lammy stated that all options will remain on the table. ​

– Mexico and Canada have discussed the US “unjustified trade actions” and have pledged to remain in “close contact” to coordinate their responses. ​

– Vietnam has said that it would reduce its tariffs on US imports while Israel announced that they would remove them entirely.