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US President Donald Trump has announced a series of reciprocal tariffs on countries that impose high import duties on American goods, including India, Japan, and several others.

 

The announcement, made at 4 pm local time on 2 April, was part of an event at the White House Rose Garden titled ‘Make America Wealthy Again’. Trump declared the day as ‘Liberation Day’, stating that these tariffs would help protect American businesses and workers while ensuring fairer trade relations.

 

The new tariffs, which take effect immediately, apply to a wide range of imported goods. However, the tariffs on automobiles will come into force from 3 April.

 

Trump’s administration has justified the move as a necessary step to counter what it calls “unfair trade practices” by several nations that levy substantial duties on American exports.

 

White House Criticises India’s High Tariffs

 

Ahead of the announcement, White House Press Secretary Karoline Leavitt criticised India for imposing 100% tariffs on American agricultural products.

 

She also pointed to other countries that have maintained high duties on US goods, including the European Union’s 50% tariff on American dairy, Japan’s 700% tariff on US rice, and Canada’s 300% tariff on butter and cheese.

 

“These tariffs have long put American businesses at a disadvantage. The President is ensuring that the US no longer tolerates such one-sided trade deals,” Leavitt said.

 

Trump himself reiterated this stance, stating, “For decades, these countries have taken advantage of the United States with their high tariffs. Today, we are levelling the playing field.”

 

India Moves Towards Bilateral Trade Agreement

 

In a significant development, India has agreed to the Terms of Reference (ToR) for a Bilateral Trade Agreement (BTA) with the United States, following an intervention from the Prime Minister’s Office.

 

This agreement is expected to provide a framework for negotiations where India may lower tariffs on American goods in exchange for certain concessions from Washington.

 

According to government sources, the finalisation of the ToR was still pending when US trade negotiators left India after four days of discussions. However, both sides are now prepared to begin formal talks to avoid a prolonged trade dispute.

 

“The PMO is keen on a swift finalisation of the deal,” a senior Indian official stated. While there is no official confirmation on whether India will completely roll back its high tariffs, the government is reportedly considering selective reductions to prevent any economic fallout.

 

Uncertainty Over Retaliatory Measures

 

While Trump’s move has been welcomed by many in the US manufacturing and agricultural sectors, uncertainty looms over how affected countries will respond. Trade analysts believe that while some nations might comply and lower their tariffs, others could impose retaliatory duties on American exports.

 

The biggest questions now are the scale of these tariffs and whether they will escalate into a broader trade war. Analysts suggest that retaliatory measures could be calibrated, targeting sectors that impact American consumers the most, such as technology and essential commodities.

 

Stock Markets React to Tariff Announcement

 

Ahead of Trump’s announcement, Indian stock markets closed in positive territory despite the trade tensions. The BSE Sensex rose 0.78%, gaining 592.93 points to close at 76,617.44, while the Nifty 50 climbed 0.72%, adding 166.65 points to end at 23,332.35.

 

IT and banking stocks led the recovery after two days of declines, as investors anticipated that India’s agreement on the trade framework could help mitigate potential economic risks.

 

“Markets have already priced in the impact of reciprocal tariffs, though uncertainty remains about the exact nature of countermeasures from trading partners,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.

 

A Potential Trade Dispute on the Horizon?

 

Trump’s latest tariff move marks another chapter in his administration’s aggressive trade policies, which previously led to major trade disputes, particularly with China.

 

Experts warn that while the intention may be to protect US industries, the outcome could disrupt global supply chains, increase costs for consumers, and create diplomatic tensions.

 

Moreover, some economic analysts argue that reciprocal tariffs could have unintended consequences for American companies that rely on foreign markets, particularly in sectors such as agriculture and technology.

 

With several US firms exporting to India, Japan, and the EU, any countermeasures could directly impact American businesses.

 

While Trump has framed this policy as a win for American workers and manufacturers, the next few months will determine how trading partners react. If major economies decide to retaliate, the situation could quickly escalate, creating volatility in global trade relations.

 

What Comes Next?

 

As the US moves forward with these tariffs, diplomatic negotiations will play a crucial role in determining the impact. India’s willingness to enter trade talks with Washington could help avoid a prolonged conflict, but much depends on how other nations respond.