US New Tariff Coverage 2025: After securing commerce offers on his phrases with companions such because the European Union (EU), Japan and South Korea, US President Donald Trump has ramped up stress on India by imposing decrease tariffs on greater than 50 international locations together with Pakistan and Bangladesh, in comparison with the 25 per cent levied on India, a brand new set of reciprocal tariffs launched on Friday confirmed.
The US has set decrease tariffs on a number of rivals within the American market, which may harm Indian exports, particularly within the labour-intensive and high-value electronics sectors. Even with no commerce deal, the US has introduced 20 per cent tariffs on Bangladesh — a key competitor within the readymade clothes (RMG) class not simply within the US but in addition in a number of Western markets.
The brand new tariffs are set to return into impact on August 7.
Even Pakistan, with whom the US has introduced a commerce deal, can have decrease tariffs set at 19 per cent. Trump had mentioned that Pakistan and the US would work collectively on creating giant Pakistani oil reserves. Nevertheless, Pakistan has seen a variety of unsuccessful oil exploration makes an attempt.
Furthermore, Vietnam at 20 per cent, and Malaysia, Indonesia and the Philippines at 19 per cent every, are Affiliation of Southeast Asian Nations (ASEAN) international locations which have additionally been assigned decrease tariffs, probably giving them higher market entry within the US within the electrical and electronics sectors in comparison with India.
Whereas decrease duties on Bangladesh and Pakistan may affect India’s RMG exports to the US, a helpful responsibility construction for Vietnam and Malaysia is anticipated to harm India’s quick rising non-leather footwear manufacturing together with the electronics manufacturing sector.
This comes after White Home financial adviser Kevin Hassett on Wednesday mentioned Trump has been annoyed with how commerce talks with India are progressing. “I feel President Trump is annoyed with the progress we’ve made with India however feels {that a} 25 per cent tariff will deal with and treatment the scenario in a manner that’s good for the American folks,” Hassett mentioned, as per Reuters.
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The notification mentioned that some buying and selling companions which have agreed to, or are on the verge of concluding, significant commerce and safety agreements will stay topic to the contemporary duties introduced “till these agreements are finalised and subsequent orders are issued”.
The India-US commerce deal is caught over delicate sectors resembling agriculture and vehicles. The Indian Categorical had reported final week that India is unlikely to comply with US calls for in the course of the ongoing commerce negotiations to simply accept genetically modified (GM) agricultural merchandise resembling corn and soya.
This assumes significance as agriculture stays one of many contentious points between the 2 international locations, and america Commerce Consultant (USTR) has beforehand flagged restrictions on its GM merchandise by international locations as discriminatory.
“The Meals Security and Requirements Act of 2006 contains particular provisions for regulating meals merchandise derived from genetically engineered (GE) sources; nonetheless, as of 31 December 2024, the FSSAI was nonetheless within the course of of building its laws. India’s biotechnology approval processes are gradual, opaque, and topic to political influences, and don’t seem to have in mind science-based approval processes for GE merchandise in exporting international locations,” the USTR report earlier this 12 months had mentioned.
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Whereas India is searching for larger market entry for its textiles, leather-based and footwear, the US is pushing for entry to India’s agricultural and dairy markets — a significant hurdle, as Indian farmers typically function on small land parcels with restricted technological help. In distinction, the US has demanded that India drop its GM regulation.
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