By Janhvi Ahuja
India and Thailand are among the countries that might be exposed to the risks of Trump’s new reciprocal tariff policy. This statement was made by many economists at global banks from Morgan Stanley and Nomura Holdings.
These two Asian countries in particular stand out due to the tariffs they have imposed on the United States. These tariffs are significantly higher than the average rate charged by the US on them, according to various estimates made by analysts using like-for-like comparisons. The issue is that Trump has not yet officially announced the potential tariff policies, including which countries will be targeted and on what basis.
In a statement directed towards clients, Nomura analysts said, “Emerging Asian economies have higher relative tariff rates on US exports and are thus at risk of higher reciprocal tariffs.” they further added, “We expect Asian economies to step up their negotiations with Trump.”
As per the latest update, Trump announced his intentions and plans for reciprocal tariffs to ensure that the US receives fair treatment, just like the other countries. He suggested that this action may replace the earlier threat of imposing universal tariffs. However, this threat might put many officials across Asian countries under pressure to please Trump to steer away from their economies that are highly dependent on exports.
Many of India’s top importers, transferring liquified natural gas and resources, are already in the midst of negotiating with their purchases of more fuel from the United States. They have taken a head start before both the countries’ leaders meet at the summit.
The average rate at which India charges the US imports is certainly more than 10 percentage points higher than the amount that the US levies on Indian goods and products.
India and Thailand are among those economies that might come under the tariff increase of four to six percentage points. This is on the assumption that the US will impose duties to reduce differential quotients. The impacts of this potential policy depend on the details of Trump’s administration and how he looks at the national average tariffs, individual products and industries or even other factors to consider.
During Trump’s first trade war, which took place during 2018-2019, some analysts from Morgan Stanley said, “Tariff actions have already been far more aggressive.” They also mentioned that the trade tensions between the Asian countries and America may also rise further.