How India is buckling up for US tariff as Donald Trump calls it ‘very high tariff nation’

US President Donald Trump said in his address to Congress on Tuesday that, starting April 2, he will impose reciprocal tariffs on countries that impose levies on American goods. This includes India, Canada, and Mexico.

On Thursday, Trump postponed 25 per cent tariffs on many imports from Mexico and some from Canada for a month. He said the delay on tariffs was only for a short-term period before the “big one” is imposed from April 2.

Trump reiterated his decision to impose reciprocal tariffs on Thursday. “And the big one will be on April 2, when reciprocal tariffs, so if India or China, or any of the countries that really...India is a very high-tariff nation."

Trump was speaking in the Oval Office on Thursday as he signed some executive orders.

“But most of the tariffs go on April the second,” Trump said before signing the orders. “Right now, we have some temporary ones and small ones, relatively small, although it’s a lot of money having to do with Mexico and Canada," he was quoted by the Associated Press.

Trump said he was not looking to extend the exemption on the 25 per cent tariff for autos for another month.

Earlier on Tuesday, Donald Trump announced that there would be no taxes on cars, provided they are manufactured in America, while highlighting how India charges the United States tariffs on the auto sector.

"If you don't make your product in America, however, under the Trump administration, you will pay a tariff, and in some cases, a rather large one," Trump said.

How India plans to face Trump tariffs?

External Affairs Minister S Jaishankar said at an event hosted by Chatham House in London on Wednesday that India and the US are working on a separate bilateral trade agreement.

“We had a very open conversation about it, and the result of that conversation was that we agreed on the need for a bilateral trade agreement. Our trade minister is, in fact, there in Washington doing exactly that right now,” Jaishankar said.

The statement came as Indian commerce minister Piyush Goyal is on a nearly week-long visit to the US for trade negotiations.

Indian chemical industry to benefit

The Indian chemical industry is set to gain from the United States' decision to impose strict tariffs on China, Canada, and Mexico, according to a report by Prabhudas Lilladher, an asset management company. The report highlighted that Indian chemical exports to the US could see a rise as American companies seek alternative suppliers to replace Chinese imports.

It said, “We believe that the USA levying severe tariffs on Canada, Mexico, and China may benefit Indian chemical companies' exports to the USA market as they may seek an alternative to China.”

The US has levied a 20 per cent tariff on Chinese chemicals, making Indian companies a more attractive option. Since India faces only a 10 per cent retaliatory tariff, it enjoys a 10 per cent cost advantage over China in the US market.