26% Tariff on India

General
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While we were sleeping, Trump went full trade war mode.

He announced “reciprocal tariffs” on over 180 countries, including India. That means the U.S. will now charge half of what each country charges America.

Here’s what he said:

“They charge us, we charge them. We charge them less. How can anybody be upset?”

Also, starting April 5, there’s a 10% base tariff on all imports, no matter the country.

For India, Trump said:

“India. Very, very tough. Very, very tough.”

“The Prime Minister just left. He’s a great friend of mine.
'You’re a great friend of mine, but you’re not treating us right.”

“They charge us 52%. We’re going to charge them 26%.”

“You have to understand we charge them almost nothing for years and years and decades.”

Here’s a quick look at the numbers he mentioned:

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“It’s our declaration of economic independence,” Trump said.
“We’ve been looted and pillaged for decades. That ends now.”

What do you all make of this? How do you see it playing out today, in the coming weeks or quarters? :grimacing:

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One thing is for sure, this is not the final word on tariffs, it is just the hard starting point for bargaining. It is going to be a traders game for weeks and months to keep on guessing the ups and downs of the negotiations. Be careful shorting the market casually, a squeeze can come any time.

PS: If this was the final tariff, then markets should adjust by falling at least 20-30%, but the GIFT Nifty is “only 1% down”.

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Found this on X, shows how multiple sectors in India is affected by the tariff move:

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Russia isn’t on Trump’s tariff list. :face_in_clouds:

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Screenshot from 2025-04-03 10-36-38

Nifty is bullish as seals and penguins will absorb the tariffs :wink:

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IMO, reciprocal tariffs would work, if America was not dependent on the countries which are reciprocally tariffed now, and there are cheaper, alternative sources, to procure such goods.

If he is gonna tariff 180 countries, there is no one left to fill that space.

I mean, if he was only doing this to fewer nations, I was thinking that the other non-tariff nations, would line-up to sell these goods at a cheaper price to America, thereby keeping the American citizens unaffected from the impact of tariffs.

It is ultimately the citizens of the importing nation, that gets affected more, by such tariffs, than the exporting nation.

Import duties are levied, so that it creates a level playing field for the domestic manufacturers, to compete with the exporters.

Such tariffs are meant to protect the domestic industries from cheaper import alternatives.

America seems to have outsourced it’s manufacturing to the rest of the world, and they are dependent on other countries, and no domestic manufacturers were getting affected, that is probably why, they were not imposing such tariffs in the past.

These tariff hikes are only going to affect the Americans.

This is going to inflate the prices for them and Trump will probably reverse it sooner.

The only thing that is working in favour of USA, is the lack of cooperation among these nations, if they could all band together, it will prove that no single country can dictate terms for others.

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I was also thinking on the same lines for a long time. But it is not same tariff on each country. And you are not thinking sector-wise. So there will be space created and competition will lead to rebalances.

Off course its negative for US citizens but not so much -ve as it is negative for the exporting nations. They may completely loose market share.

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Maybe… But the whole game is to force companies to open factories in the US, and to make existing local players more competitive. Plus tarriffs are expected to generate 3-6 trillion USD over 8-10 years, and there is a proposal to use this to offer dividends/tax-breaks to tax payers.

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Very good decision by Trump :ok_hand:
(50%)Tit For Tat.

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Just want to make it more clear with an example - Let’s say India was exporting a medicine to USA for Rs. 100 and was having 100% market share. Brazil was making this medicine also but could sell it to USA for Rs. 110. After tariffs -

Brazil (10%) - New Selling Price - Rs. 121.
India (26%) - New Selling Price - Rs. 126.

For USA citizens, cost increases by 21% but for India, they loose the complete 100% market share for this Medicine due to tariffs changing competitiveness of the landscape for countries differently.

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Btw there is no direct impact on Pharma and IT.

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Won’t companies lose out on margins? Point for outsourcing was low cost compared to US.

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Yup … India is really competitive in Pharma and hard to beat. Plus it takes quite a lot (years) of domain knowledge to just replace us like that. But IT … I am not so sure. Stock market is a good judge there. ETFs reacting accordingly.

Screenshot 2025-04-03 at 11.46.00 AM

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That is probably indirect impact, in anticipation of a recession. Already stressed because top companies were having their contract tenures halved (citing AI).

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Strongly disagree. Even with AI. 3% moves on ETFs cannot be attributed to sth that has been known and ongoing for a while now. It is tariffs - direct/indirect or the why/how behind it - is immaterial.

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Inda’s auto components, chemicals, shrimps, steel sectors (no new tariffs but recent ones in effect) are severely hit by Tariffs.

The Donald Trump government’s decision to impose a 26 percent reciprocal tariff on India will benefit the apparel and textiles sectors of the country as it will become a preferred destination for the US for its clothing and textiles requirements, as other competitor countries in this sector, such as Vietnam, Bangladesh, Cambodia, Pakistan and China, face much higher tariffs.

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Someone said Trump used 6th-grade math to tariff the entire world. basically turned a trade war into a middle school group project. import/export

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Basically, the Calculation of Tariffs by Trump

(Imports-Exports) / Imports

Source: Alan Cole on X

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