Donald Trump’s new tariffs are shaking up global trade. While China, Vietnam, and others face steep hikes, India has been hit with a 26 per cent tariff— but it’s not all bad news.
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00:00Donald Trump has announced the tariffs and phew, it's a relief.
00:04At least now we know exactly where we stand with the USA in trade.
00:08I think India is positioned to benefit from the new tariff policy of America,
00:14if this opportunity is tapped into well by our country.
00:181. Lower tariffs have been announced on Indian goods compared to other countries.
00:232. China has been levied 34%, Bangladesh facing 37%,
00:28Sri Lanka is facing 44%, Vietnam is facing 46%, some other nations even higher.
00:35But in Asia what does this mean?
00:37That India could position and work toward becoming a manufacturing hub to counter China primarily.
00:443. America is not in the safe zone completely either.
00:48They will also face an increased price for consumers eventually on imported goods,
00:52possibly looking at recession too.
00:54Let me explain these points to you.
00:56Trump did what he is known to do, optics, theatrics, full on charts showing on camera and personal remarks.
01:03He called the 2nd of April as the liberation day.
01:06But did he really think this through?
01:08About India and Prime Minister Modi, here's what Donald Trump said.
01:12India very, very tough, very, very tough.
01:15Prime Minister just left and he's a great friend of mine but I said,
01:18you're a friend of mine but you're not treating us right.
01:22They charge us 52%, you have to understand we charge them almost nothing.
01:26So India received a tariff of 26%, exactly half of what India levies on the United States of America.
01:32We expected a lower tariff, yes of course,
01:34especially after the negotiations and expectations from the bonhomie, the leadership.
01:39And therefore the commerce ministry has said in the statement that they are studying finer details
01:44and calling this a mixed bag but not a setback.
01:47Why not a setback? Look closely.
01:50The annexure 2 highlights exemptions on certain items that are crucial exports from India
01:56into the United States of America, especially the pharmaceutical products.
02:00Items that have been exempted from American tariffs include gold and silver bullion,
02:05insulin and salts, vitamins and other derivatives, coins, stainless steel, waste and scrap,
02:12platinum, palladium, basic dye preparation.
02:16The USA realizes that it cannot afford to have high tariffs on certain issues
02:20that are important for their internal market and that would otherwise cause a disruption
02:24on some important items from India.
02:27India took the negotiation route because eventually trade also has to continue.
02:31There has been work on mission 500, that is the pledge of 500 billion dollar trade by 2030.
02:38There have been already meetings and negotiations in the past few months.
02:42In the 2025 union budget, the Indian government slashed duties on several high capacity motorcycles,
02:48for example, including Harley Davidson.
02:50So there was a certain signaling, a step that possibly in turn helped looking at our 26%
02:56compared to other nations.
02:58I come to point number 2. Unlike India's negotiations, China took a confrontational route.
03:04Why is comparison important with China here this time?
03:07The tariff for China is way higher in comparison. It's 34%.
03:12But reports suggest that there could be an added tax of 20% due to the charges
03:17of flow of fentanyl into the USA.
03:20So unlike India, China therefore has been threatening action.
03:24They've even vowed a retaliatory tariff against the USA on American goods if the tariffs are not lifted.
03:30And that tariff could go higher against America.
03:33This means tensions are bound to rise between the USA and China.
03:36America also has been planning to counter China for a while now.
03:40Remember that the Chinese investment in Asian nations has been rampant in the past two decades.
03:45Small Asian countries like Sri Lanka, Nepal, Vietnam, Cambodia, Indonesia and Thailand,
03:49among other nations, are glaring examples of this.
03:52So there comes an alliance that could pose a danger to India,
03:56especially how China is known to dominate.
03:58China and Pakistan together, investing a lot in Pakistan already,
04:02and then comes in with other countries as well.
04:05USA has imposed a 49% tariff on Cambodia.
04:09Some of these nations are fully integrated with China's supply chain.
04:14So there will have to be possibly a rethink on this too.
04:18So if there's going to be an impact on the existing trade pattern,
04:21that is where India can take an advantage.
04:23Showcasing itself as an alternative for production-related needs,
04:27not for the companies based in the Western nations,
04:30but Asian companies too, and especially in the manufacturing sector.
04:34Attracting both American companies and supporting the smaller Asian nations too.
04:39So that brings me to point number three.
04:42For all of Trump's theatrics, can the impact on the US economy also hit negatively?
04:49Despite Donald Trump promising that these tariffs will benefit the US economy eventually,
04:54experts say there could be a rethink on this.
04:57The actions could actually negatively impact the USA economy too.
05:01For example, how?
05:02The price of commodities could go up,
05:04especially in sectors like the automobile industry.
05:07For instance, car manufacturers using imported parts will have to face a higher price.
05:12Consumers will have to face the rise in car prices,
05:15as well as inflation on other commodities.
05:18Let's now look at where American manufacturers have been investing in.
05:22Vietnam, for example.
05:24After the liberation day, Trump imposed a tariff of 46% on Vietnam.
05:29That means American countries that deal in clothes, toys, furniture,
05:33could face a potential price hike for customers too back home.
05:36They could in fact move out of these countries.
05:39And I'm talking about American companies like Intel, Nike, Murphy Oil, Cargill,
05:45First Solar, Boeing, among many others that are actively present in Vietnam right now,
05:51investing heavily there.
05:53What happens now to the American companies too?
05:57So American companies whose manufacturing or several sectors,
06:00especially in apparel, for example, happens in other nations,
06:03will now get disrupted.
06:06I have another thought here.
06:07The USA has definitely ruffled feathers of many countries.
06:11What if some of these nations, even though facing territorial disputes, for example,
06:15could decide to come together and forge their own alliance,
06:19thus looking at options beyond the dollar,
06:22that is a dominant currency right now in the world.
06:25So India is currently at crossroads.
06:27How it really maneuvers that path, which benefits both India and Indian interests,
06:31will be the real test of diplomacy and geopolitical strategies.
06:35We will be watching and tracking that closely.