Trump's tariff tsunami: What they mean for the world and India

US President Donald Trump on Wednesday announced sweeping tariffs on global imports, a move that marks one of the boldest protectionist pushes in recent history.

Trump introduced a universal baseline tariff of 10% on all imports starting April 5, with steeper levies for countries the US considers trade violators. These tariffs come on top of existing duties and are backed by emergency powers invoked under a national security pretext.

The policy marks a return to aggressive tariff diplomacy, with the White House targeting countries it labels “worst offenders” based on trade deficits and non-tariff barriers. China, India, Japan, and the EU are among those slapped with sharply higher rates.


Here is all you need to know about Trump tariffs:

Q: What exactly has Donald Trump announced on tariffs?

A: Trump introduced two layers of tariffs:

• A universal 10% baseline tariff on all imported goods into the United States, which came into effect on April 5.
• A second, more targeted set of “reciprocal tariffs” ranging from 10% to 50%, which will be applied to about 60 countries starting April 9.

Trump declared this a new phase in US trade, saying, “For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense. But now it’s our turn to prosper.”

These tariffs are being imposed using emergency powers under a declared national emergency citing the US’s large and persistent trade deficits.

Q: Which countries are most affected by the new reciprocal tariffs?

A: The reciprocal tariffs are aimed at what Trump’s team calls the “worst offenders”—countries with large trade surpluses with the US or those that impose higher tariffs and non-tariff barriers on American goods. Examples include:

• China: A total tariff of 54%, combining a 20% fentanyl-linked levy with a new 34% tariff
• India: Slapped with a 26% tariff, despite close diplomatic ties.
• Vietnam: Tariff of 46%
• Cambodia: 49%
• Japan: 24%
• EU: 20%
• South Korea: 25%
• Countries like the UK, Singapore, and Brazil only face the 10% universal tariff.

Q: Why did Trump implement these tariffs now?

A: The administration argues that persistent trade deficits are a national threat. Trump invoked emergency powers, citing a “national security and economic security” threat from trade imbalances. A senior White House official said, “The president would impose ‘baseline tariffs’ on all countries,” with higher reciprocal rates targeted at nations with discriminatory trade practices.
The strategic goals include:

• Boosting American industry
• Pressuring other nations to lower their own tariffs
• Generating revenue to replace income taxes

The administration says these measures could raise “hundreds of billions of dollars in any given year.” As per a WSJ report, Capital Economics estimates that Trump tariffs could bring in up to $835 billion. However, "assuming such high tariffs lead to a marked decline in imports, the increase in revenues will probably end up closer to $700 billion," they wrote in a note to clients. That would be about 2.3% of the country's GDP, they added.

Q: What happens to Canada and Mexico under this plan?
A: Canada and Mexico escape the new reciprocal tariff regime, but they’re not entirely in the clear. Both countries still face:

• 25% tariffs on non-USMCA-compliant goods
• Auto tariffs, particularly on vehicles not manufactured with a certain percentage of US-made parts

The White House clarified that Canada and Mexico will continue under prior executive orders, mainly focused on immigration and fentanyl. Trump previously announced exemptions but warned these are subject to change.

Q: What are Trump’s broader goals with these tariffs?

A: Trump has multiple ambitions:

• Revive domestic manufacturing: “If you make products in America, you pay no tariffs,” Trump has repeatedly said.
• Reduce the trade deficit: The US had a $918 billion goods and services deficit in 2024.
• Force reciprocal trade: White House officials claim the goal is “rectifying the unfair trade practices of our foreign trading partners.”
• Replace income taxes: Trump has suggested tariff revenues could fund tax cuts and reduce the national debt.

In essence, Trump sees tariffs not just as trade tools but as economic weapons to reshape the global economic order.

Q: How long will these tariffs last?

A: There is no expiration date. The executive order allows the president to adjust the tariffs based on foreign compliance. It states duties may be reduced if countries “take significant steps to remedy non-reciprocal trade arrangements.”

But the White House emphasized the current focus is enforcement, not negotiation. A senior official said, “Certainly, countries are very interested in trying to see what they can do to have more reciprocal trade. For the moment, we are very, very focused on getting the tariff regime in place.”

Retaliation from other nations could lead to further escalation.

Q: Are there any products or sectors exempt from these tariffs?

A: Yes, several sectors are temporarily shielded:

• Semiconductors, pharmaceuticals, copper, and lumber
• Energy products and minerals not produced in the U.S.
• Steel, aluminum, and autos already covered under previous tariffs won’t face new reciprocal levies.

However, the White House has launched new investigations that could bring some of these products under future tariffs, especially pharmaceuticals and computer chips.

Q: What does this mean for India specifically?

India is one of the biggest targets of this round, hit with a 26% tariff—more than Japan (24%) and the EU (20%). Trump said, “India, very, very tough. Very, very tough,” adding that despite Modi being a “friend,” India charges the US “52%.”

India had tried to avoid the tariffs through concessions:

• Lowering duties on bourbon whiskey and Harley-Davidson bikes
• Committing to buy more US oil, LNG, and defense equipment
• Promising more tariff cuts
• Despite these moves, Trump went ahead with the tariffs, likely as leverage for a broader bilateral trade deal, which both sides hope to conclude this year.

The commerce ministry is reviewing the impact of the 26 percent reciprocal tariffs imposed by the US on India, PTI reported, quoting a senior government official.

"The ministry is analyzing the impact of the announced tariffs," the official said. They added that if a country addresses the concerns raised by the US, the Trump administration may consider reducing the duties for that nation.

"It is a mixed bag and not a setback for India," the official said.

Q: How have financial markets reacted?

A: The announcement sparked a sharp decline in stock markets, especially among multinational firms exposed to global trade.

“US stock-index futures declined between 2% and 4.3% in after-hours trading,” and stocks like Apple, Amazon, and Nike fell more than 4%.

Auto companies and manufacturers with international supply chains were hit especially hard. Analysts warn the move could stoke inflation by raising the cost of imported goods.

Mary Lovely, a fellow at the Peterson Institute, said the tariffs were “much worse than we feared” and warned of “huge implications for rerouting of trade globally.”

Q: What are the possible next steps and risks of retaliation?

A: Countries hit by these tariffs are weighing countermeasures. Brazil is pushing legislation to retaliate without WTO arbitration. Canada has already imposed C$60 billion in counter-tariffs and threatened more. India may fast-track trade negotiations to win exemptions or relief.

But Trump warned, “Any retaliation by countries to the measures announced on Wednesday would be met with more levies from the US.”

In short, the world may be headed toward a new phase of trade conflict, potentially undermining the global order that has governed trade since World War II.


(With inputs from agencies)