Washington :Amid growing concerns in global markets, U.S. President Donald Trump has postponed his retaliatory tariff decision by 90 days for all countries except China. While the revised tariffs on China have already come into effect, the maximum retaliatory tariff on Chinese goods has now reached 125%. In contrast, China's tariffs on American goods have gone up to 84% and will take effect from Thursday. This exchange of tariffs has intensified the trade war between the two nations. Trump imposed additional tariffs after China ignored his warnings.
Trump has accused countries like India of damaging the U.S. economy by imposing higher tariffs on goods. However, he has now considered the global requests to reduce tariffs on goods, excluding China. Until March, the U.S. imposed a 10% tariff on Chinese products. Recently, this was increased to 54%, followed by another 50% hike, and then an additional 21%, bringing the total to 125%. These developments have raised widespread fears over how China might retaliate.
Former RBI Governor Raghuram Rajan criticized Trump's retaliatory tariffs, calling them a self-goal. He warned that these tariffs will bring uncertainty to global trade and negatively impact leading economies, although they might offer some short-term benefits for India. Rajan stated that this key decision might crash stock markets, but could also support Indian exporters and create opportunities for trade talks. He cautioned that Trump’s actions might harm the U.S. economy, even though unemployment is low and inflation and Fed rates are favorable. Countries like Vietnam, which depend heavily on U.S. exports, may face significant setbacks.
