Trade: fifty percent tariff on India by US?

Self-tutoring about politics and trade: the tutor looks into the tariff situation between the US and India.

To me, its seems hard to keep track of the US tariffs: a rate might be announced, for instance, but when it will come into effect may not be given as much press.

It’s my understanding that exports from India to the US may face a fifty percent tariff starting August 27. Yet, how meaningful might that be to either party?

In 2024, it seems India exported around ninety-one billion worth of goods to the US. It seems India’s economy that year was valued at about 3.9 trillion. The US budget deficit for that same year, just for perspective, seems to have been around 1.8 trillion.

It would seem, therefore, that the fifty percent tariff the US might impose on India on August 27 may affect around 2.3 percent of India’s economy. At the same time, supposing all tariffs are paid and trade continues as before, the proceeds from said tariffs, at around forty-six billion, might amount to about 2.6 percent of the US government deficit over an annual period.

These are rough figures, but perhaps enough to suggest why India needn’t worry too much about the proposed tariff, and why it likely won’t do much to change the US budgetary situation either.

Source:

thehill.com

data.worldbank.org

tradingeconomics.com

fiscaldata.treasury.gov