In response to the Trump administration’s controversial aluminum and steel tariffs, India has proposed tariffs on an extensive list of US exports said to be worth more than $200 million.
This retaliatory tariff has been delayed by six weeks, but is still expected to come. Every year, the United States sells about $42 billion in goods to India. India, on the other hand, exports about $72 billion worth of goods to the United States. These tariffs may be governmental actions, but they’ll mostly be hurting private enterprises.
Indian Tariffs Postponed for a Second Time
Initially, the tariffs on US exports were going to occur on August 4th, but they’ve since been delayed to September 18th. One of these was a hefty 25% tariff on apples, which could have a significant impact on apple suppliers. It was not entirely expected that India would levy retaliatory tariffs, as the aluminum and steel tariffs did not hit the country as hard as it hit others. Nevertheless, this may be global posturing, as the countries have had friction for some time.
It’s not known what actions, if any, Washington will be taking if these tariffs come to bear. It’s possible that the United States, in turn, could push back on major Indian exports. These include the following:
- Automobile parts
If the U.S. government does levy taxes on these exports, then these products will all become more expensive for the American public. In particular, an increase in medications could raise medical costs dramatically, and an increase in the price of automobile parts could be painful for the already shifting automobile industry.
Trade wars have a political purpose, but they put pressure on governments by harming industry and enterprise. Thus, this ever-escalating series of trade wars could spell some uncomfortable times ahead for those within the industries affected. It may also dampen investing as a whole.
The 30 Products India Will Enact Tariffs On
India’s proposed tariffs include a variety of goods, including:
- Peas, chickpeas, cashew nuts, almonds, and walnuts
- Apples, coffee, and wheat
- Cocoa beans, cocoa butter cocoa powder, and chocolate products
- Snow vehicles, golf carts, and other similar vehicles
Though these tariffs may seem minor in the global scale of things, they are a concerted move to put pressure on the United States. India is not the only one who has enacted tariffs: Canada, China, the European Union, and Mexico have also joined the effort.
In terms of U.S. industry, the motorcycle industry may see some difficulties, with aluminum and steel becoming more costly, and an inability to export without significant costs. Snow vehicles, golf carts, and other similar vehicles may also experience these issues. Cocoa exporters, apple exporters, and nut exporters may also be impacted in the United States, as it will become more expensive to ship their product.
India is Not Alone
China is also proposing some hefty tariffs, including an unprecedented 25% import tariff on liquefied natural gas. China has been a major player in these trade disputes, and is more heavily impacted by the steel and aluminum tariffs introduced earlier this year. Indeed, China appears to be leading the movement against the United States in terms of retaliatory tariffs, and its political weight may be contributing to the scale of the trade war.
China’s tariff list included:
- Nuts including Brazilian nuts, cashews, almonds, hazelnuts, walnuts, chestnuts, and macadamia nuts
- Dried fruits including coconut, avocado, guava, mango, orange, and pineapple
- Fresh fruits including oranges, grapefruit, lemons, raisins, apples, and pears
In addition to this, many specialized parts were also listed. It’s notable that both lists include a variety of nuts and fruits, including apples, which means that the full impact over industries is going to be felt from multiple countries rather than just a single one.
None of the tariffs that India is proposing to levy are very significant, but they could still have an impact on some of the industries in the United States. It’s still uncertain whether these tariffs will truly be levied or what impact they will have overall; it’s also not clear whether further retaliatory tariffs will be levied by the United States. However, all of this will need to be considered by investors moving forward.