'Liberation Day' Tariffs: How Trump's trade policy could impact India

U.S. President Donald Trump designated what he calls "Liberation Day," a day he uses to justify imposing reciprocal tariffs on imports from all nations with which the United States has a trade deficit.

- TDG NETWORK

On April 2, 2025, According to Trump, the U.S. has been unfairly treated in global trade, with other countries imposing higher duties on American goods while the U.S. maintains lower tariffs, creating an alarming $1 trillion trade deficit.

Trump claims these new tariffs will be "nicer" than those charged by other nations, though the specific details remain unclear. The White House has confirmed that an official announcement will be made on April 2, 2025, but it's uncertain whether the tariffs will target specific products, industries, or apply broadly across all imports.

INDIA-U.S. TRADE RELATIONS Since 2021, the United States has remained India's top trading partner. In the fiscal year 2023-24, bilateral trade between the two nations reached $119.71 billion, with India exporting $77.51 billion worth of goods to the U.S. while importing $42.19 billion from America. This resulted in a trade surplus of $35.31 billion for India—a key factor that makes India particularly vulnerable to changes in U.S. trade policy.

Considering these figures, any significant tariff hike could disrupt the delicate trade balance, raising costs for American buyers and potentially weakening demand for Indian goods.

SECTORS MOST AT RISK While the specifics of Trump's tariff policy remain uncertain, trade analysts predict that certain sectors will be more vulnerable than others. The impact will largely depend on whether the tariffs are broad-based or targeted at specific industries.