Will Trump’s India tariffs hurt American consumers?
Washington’s high levies could spiral into increased costs for consumers
US tariffs of 50% on Indian imports kicked in earlier this week, which could impact numerous sectors in the South Asian nation.
The levies are on a wide variety of Indian goods, and comprise a 25% tariff announced by US President Donald Trump in late July, along with another 25% imposed in early August as a ‘penalty’ for India's purchases of Russian oil and defense imports from Moscow, which Trump claims has indirectly fueled the Ukraine conflict.
In response, Prime Minister Narendra Modi has called on India to become more self-reliant and has asserted that “the interest of farmers is our top priority.” On Tuesday, he urged citizens to prioritize buying “Made in India” products. He acknowledged that India may face challenges due to the tariffs, but expressed willingness to accept them.
Views vary on how the tariffs will impact India. State Bank of India (SBI), the country’s top lender, notes that US trade accounts for only 2% of India's GDP, suggesting a minor impact. However, Goldman Sachs has warned that sustained 50% levies could lower GDP growth from 6.5% to below 6%.
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