Former RBI governor Rajhur Rajan criticized the Trump administration’s decision to impose a mutual tariff on about 60 countries, describing it as a “self -wound.” He pointed out that although this step will primarily harm the American economy, its impact on India will be limited.
On Thursday morning, US President Donald Trump announced new duties in fading ranging from 10 % to 50 % on imports from all commercial partners. The initial tariff is scheduled to enter 10 % on April 5, followed by a 27 % duty on April 9. Some sectors, such as medications, semiconductors, energy products, exemptions.
Rajan stressed that the immediate result of these definitions will be harmful to the American economy, describing it as a step that defeats itself. He also pointed out that the definitions will lead to the high prices of consumers in the United States, which reduces their demand and ultimately affects Indian growth.
Rajan, in an interview with PTI news agency, “Let’s realize that in the short term, this will negatively affect the American economy first and foremost, it is subjective as football players say. Access to monuments on other countries, and the direct impact of any tariff on Indian exports will be to raise prices for American consumers, reduce their demand, and promote their Indian growth.”
According to Rajan, definitions are expected to raise prices for American consumers, which may in turn reduce their request and may slow India’s exports. However, since the United States has imposed a tariff on other countries as well, the influence on India may not be severe.
He explained that the total impact of definitions on India may not be as important as they were only targeted in India, because American consumers may not be able to switch to uneducated producers if they are also competing with producers from other countries.
“Of course, to the extent that the United States has applied definitions to other countries as well, and India competes with producers from those countries, the total impact will be smaller than if the definitions have been applied to India only, because American consumers will not be able to replace the unaccounted producers,” he noticed the prominent economy.
Rajan explained that Trump’s ultimate goal is to increase local production in the United States. However, even if this initiative proves its success, it is likely that it requires a great deal of time to verify.
Meanwhile, the decrease in India’s exports may lead to an excess of goods within the local market, which may lead to a decrease in definitions. In addition, countries like China may seek to increase exports to India due to the restrictions of access to the American market.
India’s feature?
When asked if India can benefit from the current crisis, Rajan highlighted the potential benefits to reduce definitions, regardless of the impact on negotiations with the United States.
He stressed the importance of adapting to a more protection global commercial environment and suggested exploring trade opportunities with areas such as Asian, Japan, Africa and Europe. Rajan also stressed the need to strengthen relations within Saarc and overcome political differences to ensure that South Asia remains related to a world of regional trading blocs.
Mutual definitions
President Trump implemented a 26 % mutual tariff in India, citing the country’s high duty of motorcycles and other commercial barriers.
Trump accused India of manipulating currency and commercial restrictions, saying that the new tariff is a necessary counter -procedure.
Various countries, including China (34 %), Vietnam (46 %), India (26 % -are corrected to 27 %), South Korea (25 %), the European Union (20 %), others, a higher tariff due to commercial barriers and currency practices.
President Trump used the Economic Forces Act of International Emergency, pointing to the US trade deficit of $ 918 billion to justify his aggressive protectionist policies.
The comprehensive definitions were announced by Trump, noting the concerns of economic exploitation by other countries.
Trump argues that these definitions will help restore factory functions but may also lead to high prices.
Moreover, additional fees were imposed on car imports, as well as steel, aluminum and oil from Venezuela.
The comprehensive list of mutual definitions revealed by President Trump:
China: 34 %
European Union: 20 %
South Korea: 25 %
India: 26 % (later corrected to 27 %)
Vietnam: 46 %
Taiwan: 32 %
Japan: 24 %
Thailand: 36 %
Switzerland: 31 %
Indonesia: 32 %
Malaysia: 24 %
Cambodia: 49 %
UK: 10 %
South Africa: 30 %
Brazil: 10 %
Bangladesh: 37 %
Singapore: 10 %
Israel: 17 %
Philippines: 17 %
Chile: 10 %
Australia: 10 %
Pakistan: 29 %
Türkiye: 10 %
Sri Lanka: 44 %
Colombia: 10 %
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