The world has entered one of the biggest trade wars, and amid this, US President Donald Trump made a major statement regarding tariffs on India while addressing the US Congress on Wednesday. Mentioning India twice in his speech, Trump stated that India, along with China, Mexico, and Canada, imposes heavy tariffs on the US, which is unfair. He also announced the official date for implementing the tariffs, which is set for April 2, 2025. Let’s understand what reciprocal tariff is and why it has created a global stir.
Trump Says, “India Imposes 100% Tariffs…”
So, what exactly did Donald Trump say about India in his speech? He explicitly mentioned India twice, saying that India imposes a 100 percent tariff on US goods, which is completely unfair. While formally announcing the tariff war, he declared that any country that imposes tariffs on the US will now face the same tariffs in return.
Trump also listed some countries that impose tariffs on the US, stating:
“On average, the European Union, China, Brazil, India, Mexico, and Canada impose heavy tariffs on us. Have you heard about them? Many other countries also charge us much higher tariffs than we charge them. This is highly unfair.”
Reciprocal Tariff to Be Effective from April 2
Trump confirmed that from April 2, 2025, the US will impose an equal tariff on all countries that charge tariffs on American goods. Speaking before Congress, he explained that the original plan was to implement reciprocal tariffs on April 1, but he deliberately avoided this date to prevent any April Fool’s Day references.
He also warned that if a country does not manufacture its products in the US, it will have to pay a hefty tariff, in some cases, an extremely high tariff. According to Trump, many countries have used tariffs against the US for decades, and now it’s America’s turn. Additionally, he stated that if other nations impose non-monetary tariffs to restrict US goods from their markets, the US will retaliate with similar measures.
Trump believes that this move will help the US generate trillions of dollars in production and create more jobs.
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What is Reciprocal Tariff?
In the midst of this global trade war, it is essential to understand what reciprocal tariff is and why Trump is emphasizing it. Tariffs are taxes imposed on imported goods by a country to protect its domestic industries. Under Trump’s reciprocal tariff policy, the US will impose the same tariff on a country’s exports as that country imposes on American products.
During his election campaign, Trump had stated:
“Tariff for tariff, the same amount—fair and square.”
Simply put, reciprocal tariff follows the principle of “tit for tat” in trade policies. For example, if a country imposes a 10 percent import duty on US goods, the US will impose the same 10 percent tariff on that country’s exports.
Governments use tariffs to increase revenue and promote domestic production. While reciprocal tariffs aim for fairness in trade, they also have economic drawbacks. Higher tariffs on imports can increase the cost of goods and impact trade relations between countries. This can lead to rising prices and strained diplomatic ties among trading partners.