Donald Trump’s repeated mention of imposing high tariffs on India has sparked concerns about its impact on global trade. He claims that India imposes more than 100% tariffs on US goods, but this is misleading. The reality is that such high tariffs apply only to a few items, like luxury cars, and are meant to protect domestic industries. Most imported goods face much lower duties, with India’s average tariff being under 15%. For comparison, the US levies an average tariff of 5-7%.
Trump’s approach of reciprocal tariffs, where one country matches another’s import duties, is not as straightforward as it sounds. Economic structures, population sizes, and income levels differ across nations. India is an emerging economy, while the US is a developed one. Imposing the same trade policies on both doesn’t make sense.
The bigger problem lies in how these tariffs will affect the US itself. If duties on imported goods rise sharply, American consumers will face higher prices. Everyday items like groceries, medicines, electronics, and auto parts could become more expensive. This isn’t just a short-term issue. The only way for the US to avoid these price hikes would be to manufacture the same products at home, but that’s easier said than done. The cost of labor in America is much higher, and setting up large-scale production facilities will take years. Until that happens, tariffs will simply add to inflation, making life more expensive for the average American.
Trump’s plan also risks creating instability in global markets. Financial markets are already reacting, and the effects could be far-reaching. If reciprocal tariffs escalate into a trade war, it could slow down global economic growth. India, which currently has a trade surplus with the US, will likely see a drop in exports. Businesses dependent on the American market could suffer, affecting jobs and investments.
Historically, trade restrictions have often led to economic downturns rather than growth. The US-China trade war under Trump’s first term is a clear example, despite the tough rhetoric, it resulted in higher costs for American businesses and consumers. Now, targeting India and other countries with similar policies could have the same consequences.
The smarter way forward would be to strengthen economic partnerships rather than disrupt them. India and the US share strong trade and strategic ties. A collaborative approach that balances local industry protection with fair trade agreements would benefit both economies. If Trump’s tariff strategy moves ahead as planned, the US could end up harming itself more than any other nation.
