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How to brace for 'beggar thy neighbour' trade policies

March 11, 2025

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Mint Mumbai

An exporter like China will need to focus on efficiency while India could use US policy to its trade advantage

- NARAYAN RAMACHANDRAN

The word 'tariff' traces its origin to the Arabic word 'arrafa,' meaning 'to notify'. In the short few weeks of his new term, US President Donald Trump has certainly notified the world of his intention to use tariffs as his instrument of choice.

At its most basic, a tariff is a tax or duty on an imported good or service. It can be on a single product, a category of products, or applied on all imports from a specific country. In the first weeks of the new Trump administration, all these forms have been announced. For instance, Trump's 10%+10% tariff imposed on all imports that are products of China or Hong Kong. A 25% ad valorem tariff was to be applied on goods from Canada and Mexico earlier this month, but since then, several categories of products covered under the United States-Mexico-Canada Agreement (USMCA) have been exempted. Early in April, a bunch of reciprocal tariffs are scheduled to kick in, which will directly impact countries like India.

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