Regarding the impact of US tariffs, Geeta Gopinath, former deputy managing director and economist of the International Monetary Fund (IMF), said that its results point to a disturbing reality for American consumers. Geeta Gopinath posted on X that an IMF working paper shows that the tariffs imposed by America in 2025 have had very little impact on foreign exporters. Instead, American buyers mostly turned to cheaper suppliers, whose products were often of lower quality.

The IMF working paper, written by economists Jabin Ahn, Lorenzo Rotunno and Michel Ruta, analyzed detailed US census data on imports and tariffs between February and December 2025. Researchers examined how tariff increases affected prices, sourcing decisions and product quality of thousands of goods.

The study revealed that foreign exporters did not reduce prices in response to US tariffs. If we look at the detailed information at the product level, even after the tariff increase, export prices remained almost the same. This meant that the additional costs incurred due to tariffs were passed on to importers and buyers in the US. The study found that average tariff rates increased by about 8 percent during the period examined, leading to a decline in imports of about 3.6%.

What does the IMF study say?
Following the tariff increase, higher priced suppliers were more likely to leave the US market, while lower priced suppliers were more likely to enter. According to the study, about 65% of the decline in prices was due to this pattern of change in suppliers. Researchers argue that lower prices do not always mean better value.

Examining data from 2023 and 2024, they found that many new suppliers attracting American buyers had low appeal scores. When these quality-related differences were taken into account, much of the apparent price advantage disappeared. The study estimates that about half of the observed price decline after the 2025 tariffs was actually due to a shift towards lower-quality suppliers.

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When America imposed high tariffs on India, most market experts believed that it would have a serious negative impact on the Indian economy. However, India strengthened domestic demand through reforms like GST and took major steps like free trade agreements with many countries to reduce dependence on America. As a result of this, it has come to light in many reports that despite high tariffs, there was no major impact on India’s economy and on the contrary, there was an increase in exports.

A bigger threat than tariffs

On the other hand, Indian-American economist and Harvard University professor Geeta Gopinath believes that the biggest threat to India’s rapidly growing economy is not tariffs but increasing pollution. He says that pollution has gradually become a serious challenge for India’s growth, because it is not only increasing the economic cost but is also having a deep impact on human life.

Speaking at the World Economic Forum, he said that there is a lot of discussion on trade, tariffs and regulations, but big problems like pollution are often ignored.

Millions of deaths every year in India

Geeta Gopinath, citing the World Bank’s 2022 report, said that every year in India, about 17 lakh people die due to pollution-related reasons, which puts a huge burden on the economy, workforce and long-term development. He also said that pollution is not only India’s internal problem, but it is also a matter of concern for foreign investors who are planning big investments in India.

It is noteworthy that America has imposed a base tariff of 25 percent on India. Whereas the additional 25 percent tariff has been imposed due to buying crude oil from Russia at a lower price. In this way, the total US tariff rates on India are 50 percent. Trade deals have been discussed several times between the two countries, but a final agreement has not been reached. Now it is believed that the trade deal between India and America is in the final stages.

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