- The first phase of a 25 percent tariff on India is implemented; the second phase will come into effect from August 27.
Washington, August 7 (H.S.): The implementation of President Donald Trump’s tariffs is revealing significant economic repercussions. Effective today, tariffs on imports from over 60 countries, including the European Union, are officially in place. This aligns with the commencement of a 25 percent tariff on imports from India, while a 15 percent tax applies to products from the EU, Japan, and South Korea, and a 20 percent tax targets imports from Taiwan, Vietnam, and Bangladesh. Trump believes these measures will encourage substantial investments in the U.S., as indicated by his statement on Truth Social post-announcement: It's midnight!!! Billions of dollars in tariffs are now coming to the United States!
Following these tariffs, India is also subjected to an additional 25 percent tariff on Russian oil purchases, raising its total tariff burden to 50 percent, one of the steepest globally. The White House is optimistic that these tariffs will clarify the trajectory of the U.S. economy and foster new investments. However, the initial effects of the tariffs are already evident. Economic data from April shows a downturn due to the tariffs, resulting in market volatility and leading Trump to enforce a universal tariff from August 7.
John Silvia, CEO of Dynamic Economic Strategy, notes that reports post-April indicate hiring freezes, rising inflationary pressures, and a dip in major markets. He warns that decreased productivity necessitates fewer workers, while higher tariffs lower real wages. He also emphasized that the true consequences of the tariffs may take years to be fully realized. Trump views these tariffs as a strategy to combat persistent trade deficits, yet importers are attempting to sidestep taxes by stockpiling goods pre-implementation. Consequently, the trade imbalance hit $582.7 billion in the first half of the year, a 38 percent increase from 2024, alongside a 2.9 percent drop in manufacturing spending compared to last year, exacerbating the unemployment crisis among factory workers. Additionally, Trump has enforced a 100 percent tariff on computer chips.
Legal challenges loom over the tariffs, particularly regarding Trump's use of a 1977 law to declare an economic emergency. A recent U.S. appellate court hearing hinted that Trump may have overreached his authority. Concerns about the economic trajectory persist, with former Republican Speaker Paul Ryan criticizing Trump's unpredictable tariff policies. Rachel West from the Century Foundation commented on the uncertainty Trump's actions create, emphasizing that Americans are already feeling the economic consequences.
Hindusthan Samachar / Jun Sarkar
