In a move that has rattled global markets, U.S. President Donald Trump reaffirmed on Monday that 25% tariffs on imports from Mexico and Canada will take effect on Tuesday. This announcement dashes hopes of a last-minute deal and intensifies trade tensions with two of the United States’ closest allies. Not only this, Trump also imposed an additional 10% tariff on Chinese imports, effectively doubling the 10% levy he had implemented in early February.
The decision follows his previous temporary suspension of tariffs on Mexico and Canada, citing their failure to curb illegal immigration and drug trafficking. With the pause expiring on Tuesday, the renewed duties are expected to impact over $918 billion worth of imports. The news triggered a sharp sell-off in global markets, raising concerns over economic instability.
Since assuming office for his non-consecutive second term, Trump has aggressively expanded his tariff policies. Alongside the 25% duty on steel and aluminum imports, his administration has announced tariffs on pharmaceutical, semiconductor, and automobile imports.
Additionally, he has warned of a potential 25% levy on European Union imports, while working on reciprocal tariffs for any nation imposing trade restrictions on U.S. goods. Reports suggest an official announcement on this front could come as soon as April 2.
Is India Next in Line for U.S. Tariffs?
As trade tensions escalate, Trump has urged American farmers to prepare for increased domestic demand. His message, posted on his private social media platform, hints at forthcoming tariffs on agricultural imports, fueling speculation that India could be the next target.
Minister of Industry and Supply of India, Piyush Goyal, arrived in Washington on Monday for crucial trade negotiations ahead of Trump’s expected reciprocal tariffs. India has resisted U.S. pressure to lower tariffs on agricultural products, arguing that doing so could harm millions of its farmers. However, New Delhi has expressed willingness to consider reductions on industrial products like automobiles and chemicals.
During Prime Minister Narendra Modi’s recent U.S. visit, both nations committed to advancing a phased trade deal by fall 2025, with a long-term goal of reaching $500 billion in bilateral trade by 2030. As part of its efforts to ease trade frictions, India has pledged to increase U.S. energy purchases from $15 billion to $25 billion and is exploring lower tariffs on select U.S. exports, including electronics and medical equipment.
Additionally, India is considering a new electric vehicle (EV) policy that could encourage investment from international manufacturers such as Tesla. With the deadline for reciprocal tariffs looming, India’s ability to navigate the shifting trade landscape will be crucial in maintaining its economic stability while balancing relations with the United States.
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