Current Context: US President Donald Trump declared ‘Liberation Day’ on April 2, 2025, announcing reciprocal tariffs to address trade imbalances and protect domestic industries.

Key Highlights:

• Base Tariff: 10% universal import duty; higher rates up to 50% for nations with trade surpluses.
• India: 26% Discounted Reciprocal Tariff imposed.
• Other Nations: China – 54%, European Union (EU) – 20%, Japan – 24%, Taiwan – 32%.
• Affected Sectors: Textiles, electronics, chemicals, machinery.
• Objective: Address trade deficits, currency manipulation, and regulatory barriers.
• Sector-Wise Impact (India):
  • Electronics: ~$14 billion worth of exports affected.
  • Gems & Jewellery: ~$9 billion hit.
  • Auto Parts & Aluminium: Not affected by new 26% tariff, but earlier subject to a 25% tariff.
  • Pharmaceuticals: ~$9 billion exports mostly exempt.
  • Energy Products: Exempt from tariff hike.