“My fellow Americans, this is liberation day, waiting for a long time. April 2, 2025 will be remembered forever because the day the American industry was reborn, the day the fate of America was rebuilt and the day we started making America rich again.” These US President Donald J. Trump’s words were because he announced a string of mutual tariffs for countries, shaking the global trade structure. Tariff, he said, both were in response to improper trade practices by both friendly and unknown nations.
The effects of America’s ‘Liberation Day’ are only seen. Markets in Asia are already tumbling. Gold prices have risen to a record high, reaching $ 3,200/OZ as investors run to hedge against economic uncertainty. The US President’s weapons of the US President’s production, investment and distribution supply chains can eliminate trade relations between nations in areas.
A hard road for india
In relation to India, 26% of the newly imposed on exports is likely to disrupt trade in both countries for a moderate period and reduce financial markets. A recent report estimated that if the US imposed a wide country-level tariff of 25% on Indian imports, India’s GDP can take a hit of $ 31 billion. This figure can now be too high, given the indirect impact of tariffs on those countries where American and Indian product supply chains are deeply connected. This will cause an increase in prices of input and intermediate goods, which will add the cost of production. The most affected areas in the Indo-American context are likely to have electronics, gems and jewelry and pharmaceuticals. All this is an important spine of India’s rapidly growing export economy: in the case of smartphones, for example, India contributes to about 10% of American imports.
New measures also include a universal base line 25% tariff on all automobiles; India will also be subject to this, regardless of any possible exemption. Indian pharmaceuticals, which account for $ 7 billion in exports to the US and contribute to about 47% of the US normal drugs, will see an increased cost. Similarly, India’s $ 9 billion textile sector, which is again a labor-intensive industry, will struggle against cheap contestants such as Vietnam and Bangladesh, risking millions of jobs. The $ 8.58 billion jewelery export industry will lose its price profit for rivals such as China and Belgium. Auto parts export, the value of $ 2 billion, will withstand failures, which will disrupt supply chains for American manufacturers. Even IT services, which send approximately $ 100 billion to export to the US, are at risk of retaliation measures that can destabilize India’s largest foreign exchange.
Tariffs are not new
While specific details about the implementation of these tariffs are unclear, a comprehensive photo reveals unwavering commitment to Trump’s conservationist policies. But is that approach new?
Prior to Trump’s current Theatrics on the tariff, former President Joe Biden’s own trade policy increased the size and scope of the tariff of Trump administration on Chinese imports. In fact, to promote the demand for American household items and encourage investment, the Biden administration bounced a combination of tariffs and industrial policies that promise Trump. It is important to note that by 2023, the United States had the highest investment rate in factories in 30 years.
As Lori Walch recently argued, “It is a mistake to label tariffs as Trumpian that Trump’s critics have repeatedly made out in America and”. If you support carbon border tax to combat climate change, or support the enforcement of labor standards in the trade treaty, you support the tariff. And tariffs, most, are popular – even if not practical. “Shortly before the US presidential election, 56% of the Americans favored the growing tariff, with the support between non-college-educated voters in Michigan, Wisconsin and Ohio at 58%”, Walch wrote.
Flashback from Trump’s first term
What Trump did in his first term, which was not as an economic equipment but as a national revival tools, something that allowed him to re -organize business deals to work in American interests. In some ways, he just continues to continue what he started, but up to a very intense degree.
Trump sees trade deficit not as economic imbalance but as evidence of foreign exploitation. The measures he launched in 2018 included 25% tariff on steel and 10% on aluminum imports of many countries, including colleagues like Canada and European Union. However, China was the focal point of this trade war. By putting tariffs on $ 370 billion Chinese goods, the administration ignited a tight-for-tat trade war that came to reopen the US-China relations. The tension in the 2020 “phase a” deal with China clearly ended, which failed to meet its sublime purchase goals and left most of the tariffs.
Unlike previous administration, which focused on liberalization and multilateral engagement, Trump considered the business as a zero-zero game. Their argument was simple: If the US runs a loss with another country, tariffs will be imposed. In his last term, he withdrew from the Trans-Pacific Partnership (TPP) in his first day’s office and pushed him to the Renaissance of NAFTA, resulting in the United States-America-Maxico-Canada Agreement (USMCA), a compromise, which performed his choice for bilateral renaissance on multilateral cooperation. This step was much more symbolic than the radical.
Results, results
Tariff wars, however, are expensive, even if the populist celebration loses people’s vision on it.
Several economic studies, including one from the Federal Reserve Bank of New York, showed how Tariff affected American consumers and businesses in the past. In Trump’s last term, the prices of retail and consumer goods hit the sky, while importers struggled with some transferred production to Mexico or Vietnam with uncertainty and transfer chains. Although it began as a fight on the business balance, it developed rapidly in strategic decupening, something that became more leveled and preventive over time. American farmers faced collateral damage in the form of China’s retaliatory tariffs, destroying soybean exports, forcing the Trump administration to provide more than $ 28 billion in subsidy. In many midwestern states to be insolvency, although Trump managed to maintain strong rural support.
The irony and most importantly is that the overall American trade deficit widened during Trump’s last term, and the trade deficit with China, while temporarily shrunk, was eventually rebounded, exposed the limits of tariffs as a long -term corrective measure.
The US decision of a major beneficiary of the US Generalized System (GSP)-2019 in India ended the duty-free access for more than $ 6 billion to cancel its particular position, hurting small and medium-sized enterprises (SMEs), especially in areas such as textiles, auto parts and leather.
Multiplicity for bilateralism
Many US administration in the past pursued global trade liberalization through multilateral agreements. The Obama administration interacted on TPP, a comprehensive agreement that aims to reduce tariffs among 12 Pacific Rim nations as well as to combat China’s influence in Asia-Pacific. However, opposition from both left and right killed American partnership before obedience.
In contrast, Trump’s approach represented a paradigm change: from multiplicity to bilateralism, from trade liberalization to trade conflict. And, which Biden’s decision did not destroy Trump’s tariff, only reflected the political popularity of protectionism, even though the strategy was different. Biden insisted on re-evaluation with the Allies, modernization of business equipment and ‘friendly-shoring’, encouraging America-based companies to move production for reliable colleagues like China instead of Opponents. He also approached protectionism in a different way: through ‘strategic investment’. For example, his administration passed the Chips and Science Act (2022) to promote domestic semiconductor manufacturing and reduce dependence on China, Taiwan and South Korea. Similarly, inflation in inflation act (IRA) was passed to support clean energy and to reduce dependence on Chinese materials by conditioning subsidy on domestic production.
Economic producer
All this signs are an American twist towards economic exciseism, that is, a set of policies that enables increase in productivity and increase in ‘good’, if chased through an Renaissance trade policy, secured jobs. To what extent can Trump achieve it in his second term, it is yet to be seen, but is an example. Ronald Reagan chased a similar trade strategy against Japan (to reduce automobile imports from Japan to America using quota to America) at a time when Japanese cars were ruling the international market. His works brought Japanese automobile investments in the US, shaping the industry in the southern states.
Both Trump and Biden have used tariffs to complete domestic constituencies, proving how deeply they are embedded in electoral strategies. Trump’s ‘US First’ policy, especially targets the rust belt where the trade with China and globalization was attributed to manufacturing collapse for a long time, which he got in the second time-according to Kamla Harris, whose tariff ended a large part of the Democrats. Blue-collar workers continued to support their protectionist stance, disregarding that anti-counterparts adversely affected their economic welfare.
Conservationism, thus, is not limited to right -wing localism today, but has been woven into mainstream bilateral politics. In the era of fragmented coalitions, tariffs (unfortunately) have become signs of mistrust, punishment and alignment-the tools are not only of economics but of power projection in a multi-polar and multi-fragmented world order.
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Disclaimer: These are the personal opinions of the author
