The United States (US/USA) President Donald Trump announced tariffs on Wednesday, 2nd April, 2025. The 27% tariff that India exports to the United States comes after weeks of negotiations. However, these are less than tariffs announced for other South Asian countries like Vietnam (46%) and Bangladesh (37%). Certain industry experts and market trends suggest that globally, Donald Trump’s tariffs will affect liquor, meat, and sugar the most, in a negative way. How the tariffs will affect these sectors is something we’ll focus on in this article.
How Tariff Rates Have Been Calculated
President Donald Trump’s ‘reciprocal tariffs’ are the taxes that the US government will levy on imports. As a result, several major trading partners of the country will be significantly impacted by these tariffs.
The tariff rates have been determined using a formula that calculates a country’s trade surplus with the US and divides it by the total exports. This is based on 2024 data from the US Census Bureau. The number that is obtained is then halved to produce the ‘discounted’ rate. US will be levying a 10% baseline tariff on all imports and higher rates for certain countries. They mark the highest trade barriers in over a century.
Countries With Significant Tariffs
About 60 countries will face higher tariffs, up to 50%, more than India’s tariffs. These include Vietnam, Cambodia, Bangladesh, and Malaysia. The European Union (EU) will face a 20% tariff, whereas China will face a 34% tariff. Both the EU and China account for about a quarter of US imports. They are among the top three suppliers to the US, with the third one being Mexico.
When it comes to India, tariff has been slightly reduced from 27% to 26%, effective from 9th April, 2025. Trump had highlighted how India imposes 52% tariffs on the US, and has, as a result, imposed a discounted reciprocal tariff of 26% on India.
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Sectors That Can Be Worst Affected
How the reciprocal tariffs will impact Indian businesses will depend on whether they’re implemented at the product level, sector level, or country level. India’s exports to the US span across 30 sectors, with 6 in agriculture and 24 in industry. If sector-level tariffs are implemented, alcohol, wine, and spirits will face the highest tariff hike at 122.10 per cent. The dairy industry, which accounts for $181.49 million in trade, will face a 38.23 per cent tariff, making ghee, milk, and butter costlier.
Also, fish, meat, and processed seafood will face a 27.83 per cent tariff differential. Shrimp, a major export, will become significantly less competitive. Live animals and animal products will face a 27.75 per cent tariff differential.
Other sectors that can be affected include edible oils (including coconut and mustard oil), industrial goods, footwear, diamonds, gold, and silver, as well as processed food, sugar, and cocoa.
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Summing Up
Overall, economists across the globe expect the tariffs to upend global trade and slow down global economic growth. Some say that with the tariffs increased for other South Asian countries, India has a golden opportunity of strengthening its position in global trade. If the country manages to make its scale production more efficient and works more on domestic value addition, it can easily strengthen its position in the global economic arena.
FAQs
Is There A Tariff From India To The USA?
Yes, there is a 52% tariff from India to the USA, including currency manipulation and trade barriers.
What Is The USA Importing From India?
The USA majorly imports commodities like medical appliances and accessories, precious stones, metals, pearls, textiles, and iron and steel articles.
Which Commodity Is Most Exported From India?
Here are the most exported commodities from India:
- Leather goods
- Textiles
- Dairy products
- Automobiles and equipment
- Precious stones and metals
- Petroleum products
