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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The US government may have given some electronic products exempted from tariffs i.e. import duty, but this relief is not going to last long. US Commerce Secretary Howard Lonik has clearly stated that this discount is just temporary and soon a special “semiconductor tariff” will be imposed on these products.

What did Commerce Secretary say?

Talking on the ABC channel’s show ‘This Week’ on Sunday, America’s Commerce Secretary Lonik said, “Many electronic items like smartphones, computers, solar cells, flat-panel TVs have been excluded from the tariffs right now, but all these products will be under semector tax in the next 1-2 months.” He said that America now wants to build these essential things like chips, flat panels and semiconductors in its country itself. Lonik insisted that we cannot be completely dependent on South East Asia.

It is a matter of national security

Lonik also made it clear that this is not an issue that can be resolved by negotiating with other countries. He said that these products now come under ‘National Security’. Meaning, it should now be made in America. They cannot be exempted from tariffs forever.

What is the thinking of Trump administration?

President Donald Trump and his team want factories to be made again in America, especially the goods related to medicines and technology. For this, companies are being forced to bring back the manufacturing by imposing tax on imports.

Which products are now exempted?

On Friday night, the US Customs Agency issued a notice stating that things like smartphones, computers, solar cells, TV displays, and storage devices are currently exempted from tariffs. But now it has become clear that this discount is temporary and tax may be applied again in the coming months.

Message to india

The tariff policy in the US has now directly connected to the National Security. For countries like India, it is an indication that in global trade, more ‘safe trade’ is coming more than ‘free trade’.

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China on us tarifs: The US further increased the tariff from 104 percent to 125 percent over the goods imported from Beijing, increasing the commercial tension with China. In his social media post, President Trump said that he is going to apply a brake on the recipe rocked because many business partners took initiative to negotiate instead of retaliation. But he made serious allegations against China and said that he did not respect.

Beijing took counter action on tariffs and increased the tariff on the goods imported from the US to 84% on Wednesday. This was trying to give a stringent message to Trump. However, after assuming power in January, President Donald Trump has increased tariffs on Chinese goods five times so far.

What can China do?

China has been constantly saying that they will fight till the end. Along with this, business tension between the world’s two economic axis is increasing. It has been said on behalf of China that he has also lodged his protest in front of the World Trade Organization (WTO) against Trump’s move.

Chief Economist Zhiwei Zhang told AFP in Pinpoint Asset Management that China has given a clear indication that they will not turn back. He further said that there is no fast and easy way to solve this fight.

According to Sky News report, export of rare minerals can be controlled by China. These minerals are used for high technology products such as computer chips and electric batteries. A large part of the supply of rare minerals being made in the world is under China’s control. In addition, China can target high profile companies such as agricultural goods and Apple-Teslas that have more impact products. However, according to the report, efforts are being made to attract maximum foreign investment from China.

Also read: With which plan Donald Trump except for the rest of the world, only imposed 125% tariff on China

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.