Trump slaps 'reciprocal tariffs': 26% on Indian products, 34% on China, 20% on EU

WASHINGTON, Apr 2: President Donald Trump announced 'reciprocal tariffs' on goods imported from other countries like India, China, Japan, the European Union, Taiwan and Israel at an event called 'Make America Wealthy Again' at the Rose Garden in the White House at 4:00 p.m. Eastern Time (ET) on Wednesday (1:30 a.m. IST Thursday), dubbing the day a “Liberation Day” for the Americans.

Trump has slapped 26 per cent tariff on Indian products, 34 per cent (plus 20 per cent already imposed) tariff on China, 20 per cent on the EU, 24 per cent on Japan and 17 per cent on Israeli products. The base tariff applies to more than 180 countries. That is, imports will carry a minimum rate of 10 per cent for all.

There are no additional levies on Canada and Mexico, the two largest US trading partners, which were already charged 25% 'penalty' tariffs recently.

The base rates will be effective April 5 and the reciprocal rates on April 9.

About India Trump said, "You've not been treating us right. India charges us 52 per cent, so we will charge them half of that - 26 per cent." He wants to be lenient.

Unlike other countries that adopted a threatening posture even before the actual announcements of the reciprocal tariff, India has been waiting to see what Trump actually does before determining and preparing its response in anticipation.

The immediate impact of the new tariff regime will be a steep rise in cost of foreign goods for Americans and reduced margins for all the players. Because tariff, simply put, is a tax.

Counter-measures by trading partners would send global prices skyrocketing. Some say there will be a turmoil in the markets.

What Trump's Chief Economist says

But Trump's top economist, Stephen Miran, told Fox Business the tariffs would work out well for the US in the long run.

Time will prove it may not work out like that. Economic forces are too large and complex for one man or country can easily manipulate. Else, the 'self-decorated' economists would have found solutions for man's economic problems long time ago!

The new reciprocal tariffs in all these affected countries as well as the US will initiate a cascading effect on markets and manufacturing. Simultaneously, the differential rates will also set off a new 'trade war' benefiting some countries in the lower tariff brackets vis-a-vis exports to the US.

While experts said Trump's policies will impact Americans adversely, and that it might create a global economic turmoil, the President said history will prove he was right.

"My fellow Americans, this is Liberation Day, waiting for a long time. April 2nd, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to Make America Wealthy Again," Trump said.

He asserted that his ‘reciprocal’ tariff rates are ‘kind.’ He meant they are not retaliatory, could have been much steeper.

After his speech in the Rose Garden, Trump signed two executive orders on the reciprocal tariff.

Later, Treasury Secretary Scott Bessent told US trading partners not to resort to retaliatory actions against the new tariffs. “I wouldn’t try to retaliate. As long as you don’t retaliate", he said.

Canada, Australia, Ireland and Italy are responding to US tariffs with countermeasures.

But not the woman in Mexico. She won't be game for engaging Trump in a tit-for-tat trade war. She is rather sensibly confined to evolving a different domestic economic strategy for Mexico, not distracted by Trump.

There was a temporary global crash of shares, especially in Australia.