The tussle between affordability and public goods is easy to lose

Affordability is a potent political issue in the US as in India but using cash transfers to address it threatens vital public goods

- INDIRA RAJARAMAN

It finally happened. Effective 13 November 2025, President Donald Trump of the United States of America exempted 225 agricultural items, fresh and processed, from tariffs termed ‘reciprocal’ but actually unilaterally country-specific.

The new zero-tariff list is product-specific, not differentiated by country.

For Indian exports on the new list, tariffs came down to zero from 50%. They cover a wide range from fruits and nuts like mangoes and coconuts to processed foods like coffee and tea extracts (masala tea powders) and even vegetable waxes. In value terms, Indian agricultural exports to the US were valued at $1 billion in the pre-tariff era, roughly one-sixth of total agricultural exports by value.

The precipitating factor was not trade negotiations with the concerned countries, but recent election outcomes in the US to the posts of mayor and governor in assorted cities and states, in which affordability (read: tariff-hiked prices) was a major issue. It was the key platform on which Zohran Mamdani won his bid for mayor of New York City.

Fiscal revenue was the motivator of the earlier ‘reciprocal’ tariffs imposed by the US, contrary to announced reasons. In an informal conversation with press representatives on 14 November, the day after the tariff reductions, the US president is reported to have said tariff revenue would (still be enough to) enable a $2,000 payment to low-income American households to be announced next year.