India most vulnerable to U.S. reciprocal tariffs
Investing.com -- India is likely to face the biggest impact from potential U.S. reciprocal tariffs under President Donald Trump’s proposed trade policy.
Trump appears to have shifted away from a universal import tariff of 10%-20% in favour of country-specific duties based on factors such as existing tariffs on U.S. goods, value added tax rates, and non-tariff barriers.
India would be hit hardest in Asia, followed by Pakistan, Thailand, and Vietnam. While China has lower average tariffs on U.S. goods, non-tariff barriers could still make it a target.
“We don’t yet know the formula that will be used to calculate reciprocal tariffs. But based on a simple calculation that sums VAT rates and the difference in tariff rates, India emerges as the country that would be hit hardest by a new tariff regime,” Capital Economics analyst said.
Capital Economics noted that recent trade moves by India, including lowering duties on motorbikes and bourbon whiskey, suggest countries may seek to negotiate with Washington to mitigate potential tariff hikes.