Kolkata: The new tariff wallwhich US president Donald Trump wants to build around imports from many countries, including India, is progressing fast and
the new tariffs could be in place in just about 75 days or so, US treasury secretary Scott Bessent has said. According to a report by Bloomberg, Bessent said that by July Trump’s tariffs could be restored to the levels in place before the Supreme Court struck them down. Trump’s tariffs were especially harsh against imports from India since they reached a level of 50%, which was perhaps the highest on imports of goods from any country. While 25% was due to the IEEPA tariffs (International Emergency Economic Powers Act), another 25% was slapped against India for importing crude oil from Russia. As a result various sectors of the Indian economy suffered for a few months until Trump faced the legal blow. The verdict of the Supreme Court in January this year trashing the IEEPA tariffs as unconstitutional triggered a frantic search by the US administration to put in place fresh tariffs to protect the American businesses from more efficient imports from around the world.
Section 301 Trump’s new ace
“We had a setback at the Supreme Court in terms of the tariff policy, but we will be implementing or conducting Section 301studies, so the tariffs could be back in place at the previous level by beginning of July,” Bessent said at an event in Washington. Significantly, after the apex court in the US struck down many of his tariffs imposed around the world, Donald Trump went ahead to slap a temporary tariff on goods from many countries. But the rate was far less than what the ISSPA tariff earned for Trump. The new tariff was only 10%. It is effective now but will expire on July 24.
India threatened, so are others
In March US Trade Representative Jamieson Greer revealed that the US began an investigation to find out unfair trade practices under “Section 301” and this could lead to fresh tariffs against India, China, the EU, Japan, South Korea, Mexico, Taiwan, Vietnam, Thailand, Malaysia, Cambodia, Singapore, Indonesia, Bangladesh, Switzerland and Norway.
What’s worse, if Bessent’s statement comes true, these tariffs could India hard since it will follow the wide ramifications of the US-Iran waron Indian economy. The energy disruptions resulting from the war has already unleashed inflationary pressures in the economy. Obviously, it will impact consumption levels and impact GDP growth prospects this year. Any fresh tariffs on import by the world’s largest economy will accentuate this negative impact.
Which sectors earlier suffered due to Trump’s tariffs
The tariffs that Trump imposed on India took a toll on a number of sectors, which were also labour-intensive, to make matters worse. These sectors were carpets, textiles, apparels, gems & jewellery, leather goods and seafood where shrimps became a special victim. Export demand dipped in these sectors (specifically shrimp). These industries faced significant declines in import demands and jeopardised the livelihood of lakhs of workers.
