Additional tariff from America on India has come into force today (27 August 2025). Additional tariffs are expected to cause moderate pressure on labor based industries such as textiles and gems and jewelery, while industries like drug, smartphone and steel will remain untouched by this effect of tariffs due to existing tariff structures and strong domestic consumption.

A latest report by SBI Research states that American tariff may affect the US GDP 40-50 basis points. The report said, “50 per cent of tariffs will affect $ 45 billion exports, in the worst, India’s trade surplus will turn into a trade deficit. However, we believe that business talks will restore confidence and improve exports to America.”

Drug imports discounts from India
America has exempted drug imports from India. India stake in 2025 in the total drug imports of America was 6 percent and in FY 25, 40 percent of India’s drug exports was recorded to the US. Meanwhile, due to the effect of recent tariffs and weak dollars, new inflationary pressure signs in the US, especially in import-sensitive areas such as electronics, autos and consumer durables, have started appearing.

These countries will benefit due to India
Between high tariffs, India’s product may lose their ability to compete, which may potentially benefit countries such as China and Vietnam. The reason for this is that the tariff imposed on India is more than other Asian countries. The tariff rate is 30 percent for China, 20 percent for Vietnam, 19 percent for Indonesia and 15 percent for Japan. According to the report, “America remains India’s largest textile export destination. In the last five years, India has steadily increased clothing market share, while China’s share has declined.

This change reflects India’s growing importance in the American Supply Chain system. The US remains the largest market for gems and jewelery sectors, which is about one third of the region’s annual exports of $ 28.5 billion. With the US tariffs being increased from 25 percent to 50 percent, exporters are ready for significant disruption.

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Donald Trump Speaks to Mark Carney: On Friday (27 March 2025), US President Donald Trump and Canadian Prime Minister Mark Carney had a telephone conversation on Friday (27 March 2025). In this conversation, trade, tariffs, sovereignty and relations between the two countries were discussed.

Donald Trump said on his social media platform Truth Social that this call was very positive and the two leaders agreed on many important issues. He said, “I just talked to Canadian Prime Minister Mark Carney. It was a very productive call. We have agreed to many things and will meet business and other issues soon after Canada’s upcoming election.” However, the question is whether this conversation would actually improve relationships, or was it just a political show?

Increasing trade tension in America-Canada
A few days ago, Trump imposed a 25% tariff on the Canadian automobile industry, causing a major setback to the Canadian economy. Canada’s auto sector is the second largest export industry. More than 75% of Canada’s exports go to the US. The supply chain was disturbed due to the tariff and increased economic uncertainty. Due to the implementation of tariffs, thousands of jobs in Canada were threatened. Reacting to this, PM Carney launched $ 1.4 billion “Auto Jobs Security Fund”.

Trump’s controversial comment
Amidst the trade dispute, Trump created a new controversy by making a statement. He had advised Canada to be made the 51st American state, causing resentment among Canadian citizens and leaders. Trump had said, “Canada should be a part of America. This will solve the issues of trade and security.” To this, Mark Carney immediately reacted and said “Canada’s sovereignty should be respected.”

Canada’s answer: will reduce dependence on America
Carney said that his government is working on a new business strategy so that Canada will not have to depend on America. There is a plan to strengthen business relations with Europe and Asia. Emphasis is being laid on increasing domestic production. New business partners are being discovered to reduce imports from the US.

Canadian opposition parties also against Trump
Opposition leader Pierre Polyere and other leaders in Canada criticized Trump’s “Dadagiri” and said “America should treat Canada respectfully.”

Will Canada-America relations improve?
Explain that if Trump agrees to reduce the tariff, the relationship can improve. If Canada implements a new business strategy, dependence on the US may decrease.
At the same time, if Trump puts more tariffs, business war can happen. If Trump’s ’51st state ‘comments continue, diplomatic tension may increase.