Synopsis : US President Donald Trump has paused 26% tariffs on Indian imports for 90 days, sparking relief among exporters. However, China faces a severe blow with a 125% tariff hike, escalating global trade tensions.
In a dramatic move that sent ripples across global markets, US President Donald Trump announced a 90-day pause on proposed 26% tariffs on India and several other nations, just hours after the tariffs technically went live. However, China was excluded from this temporary relief, with Trump imposing a steep 125% tariff on Chinese imports, effectively igniting fresh sparks in the ongoing US-China trade war.
The announcement follows growing unease in US financial markets, with a fast sell-off in US Treasury bonds raising alarms. According to CNN, the US Treasury Secretary Scott Bessent urged Trump to reconsider the sweeping tariff implementation due to increasing pressure from the bond market and concerns about macroeconomic instability.
Meanwhile, Indian Commerce Minister Piyush Goyal reassured exporters not to panic, confirming that India is actively working with the US to achieve the "right mix and right balance" in the upcoming trade agreements. Goyal emphasized that while negotiations are being conducted swiftly, the government is also ensuring a well-thought-out approach to avoid any adverse long-term consequences.
Experts believe that China is now increasingly isolated, with only Canada joining in retaliating against Trump’s trade measures. The Chinese government imposed 84% counter-tariffs on US imports, deepening the standoff.
In a statement reported by CNN, US Commerce Secretary Howard Lutnick mentioned that President Trump expects a direct call from Chinese President Xi Jinping. Any negotiation, he said, would be personally handled between the two leaders, indicating a potentially high-stakes, top-level diplomatic exchange.
Adding to the complexity, Citi analysts warned that while the trade war may not severely damage bilateral trade in the short term, the risk of global spillover remains high. Without de-escalation, they predict that international markets could face volatility and uncertainty over the next few months.
In contrast, the US has opened channels for a possible trade pact with Vietnam, as per BBC, aiming to eliminate several non-tariff barriers and bolster bilateral commerce.
While the temporary pause brings momentary relief to Indian exporters and policymakers, the evolving geopolitical climate suggests this is only the calm before the next economic storm.
Disclaimer : This article is intended for informational purposes only. It does not constitute financial or investment advice. Please consult a qualified professional before making trade or investment decisions.
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