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The tariff policy of US President Donald Trump has shocked the global economy. This decision of Trump can become a matter of concern for many countries. Investment and global trade are already being affected, and people are also afraid of recession. Trump took a decision on 2 April. It was called “Mukti Day”. If Trump decides to apply long -term tariffs, the supply chain is at risk of disrupting. In 1930, an US President took a similar decision, which led to the grip of the whole world recession, including the US. There is also a threat to Trump’s “liberation day” to re -recession of the world. Meanwhile, let us know through this report which sectors will be affected by the ongoing tariff war between the US and China…
America-China tariff war
As soon as the President was sworn in, Donald Trump started tariffs on some countries including China. On 4 February, Trump decided to impose 10 percent tariffs on all Chinese imports except Canada and Mexico. Even after 30 days, tariffs on China were retained, leading to a dispute between the two countries. In April, Trump announced a 10 percent baseline tariff. He then decided to impose “mutual” tariffs on the countries with which America is in loss in trade. This created confusion all over the world.
Even friendly countries were not exempted from tariffs. Tariffs were imposed on several countries including India and Israel on the basis of business differences. However, within a few hours, he suspended this implementation for 90 days (till 9 July) and retained the 10% Aadhaar duty.
The US has a trade deficit of about $ 295 billion with China and Trump has imposed heavy tariffs on it. Starting from 10% tariff in February, Trump increased it by 34% in March and took it to 125% by April. In response, China also increased tariffs on US imports to 125%. The situation is that the two countries have imposed more than 100% tax on each other’s products, causing heavy chaos in the local market. The White House later clarified that the US actually imposed 145% tariff on China. This tariff war between these two countries will not only harm them, but the global market is also facing recession.
India’s trade deficit with the US is $ 49 billion and India is not untouched by Trump’s tariff. India is at risk of huge economic losses based on the amount of exports to the US. Trump imposed 26% tariff on India before 90 days of ban on tariffs. However, like concessions given to other countries, India has also been given some exemption for business agreements.
Indian exporters have expressed serious concern about the impact on their business. According to an analysis of Delhi -based think tank ‘Global Trade Research Initiative’, if Trump’s tariff policy continues, India’s exports may fall by $ 5.76 billion (about 6.4%). In 2024, India will export more than $ 89 billion to the United States. If the trade agreement fails and maintains its stance on the trump tariff, it can have a major impact on India’s economy, which is largely dependent on trade with the US.
India’s reaction to Trump’s tariff has been restrained. Instead of imposing tariffs in response, India has focused on dialogue with the US to minimize economic losses. India is trying to sign a trade agreement as soon as possible. If this trade competition continues between the world’s two largest economies, it will not only cause a recession in the US-China trade war, but it will also affect developing countries like India, which depend on the import of raw materials for their exports. Therefore, India will have to be cautious at many levels.
It can also have a greater impact than bilateral tariffs, as India is dependent on both America and China for raw materials. India imports raw materials from these countries, processing them and exports to Europe and other countries – this is the mainstay of India’s trade.
Will it affect India’s medical field?
India exports a large amount of steel, aluminum and generic medicines to the United States. To take the example of pharmaceuticals sector only, India exported medicines worth $ 9.7 billion to the US in 2023-24. Trump’s next target will be Pharma sector, which is likely to have a direct impact on India’s medical field. India contributes 20% globally in the region and in 2023 the revenue of the region was around $ 50 billion. India may benefit slightly in apparel and some other areas, as many manufacturers are looking towards China for cheap manufacturing options. However, the losses from global economic recession will be many times more than these benefits.
China says that business with America is not a favor, but a matter of mutual profit. The same applies to India as well, as India imports API (active pharmaceutical ingredients) from China and processes them in drugs, which are exported worldwide. Most of the Chinese raw materials come to India, its value is promoted and exported.
Trump’s actions are weakening this mutual gain, and the world should now seriously consider the issue, otherwise the 1930s -like gathering may return. Rating agencies like JP Morgan have expressed 60 percent of the possibility. Agencies like Goldman Sachs and Morningstar have also predicted a recession of 40–50 percent.
Global impact of tariff war
The impact of the trade war launched by Trump will not be limited only to America, China and India, but it will also affect the GDP of many countries. Countries that have high exports to the United States will have a particularly bad effect. According to the International Trade Center, Trump’s tariff may reduce global trade by 3-7% and global GDP may reduce the GDP, and it will have the most impact on developing countries. If the tariff remains in force, a major textile exporting country like Bangladesh may suffer a loss of up to $ 3.3 billion by 2029.
Loss of 10 trillion dollars
The stock market saw the biggest decline in history after Trump’s announcement. After the announcement of mutual tariffs, the US stock market lost $ 6.6 trillion in just two days. Global equity caused a loss of about 10 trillion dollars. Which is 10 percent of the global GDP and more than the total GDP in 150 countries.
According to the Penne Wharton budget model of the University of Pennsylvania, Trump’s tariff scheme will receive some revenue, but this will cause more damage. If the tariff is strictly implemented, the US may receive a revenue of $ 5.2 trillion in the next 10 years, but there is a possibility of a decline of 8% in GDP and 7% in employment.
Trump, Tariff and History
Trump’s tariff policy is similar to the Smut-Hole Tariff Act of the 1930s, which was a major cause of the Greatness. The tariff act was passed during the reign of Republican President Herbert Hoover. Between 1929 and 1934, international trade declined by 65%. The US economy went into recession, GDP declined by about 30% and unemployment reached 25% by 1933. Trump’s tariff policies can also pose a similar threat. According to some analysis, some experts believe that the current tariffs are more than the smooth-hale era tariffs.