US President Donald Trump has rolled out a new tariff policy that could shake up global trade, and you need to know how. Here are five key points that break it all down for you:
- What are tariffs?
Tariffs are taxes on imported goods. When goods come into a country, the importer pays a fee, which usually gets passed on to consumers. It’s essentially a tax that makes foreign goods more expensive.
- What are reciprocal tariffs?
This is a tit-for-tat approach. If a country charges the US a 25% tariff, the US will now do the same for their goods. Trump calls this “fair trade.”
- What has Trump announced?
The US will now impose tariffs equal to what other countries charge American goods. India, for instance, will face a 26% tariff when exporting to the US under this new rule.
- Why is the US doing this?
Trump believes these tariffs will bring manufacturing back to the US. By making foreign goods more expensive, the idea is to encourage companies to “Make in America.”
- How does this affect India?
India is watching closely. While exporters may face short-term challenges, experts say India is better positioned than many competitors. The Indian export council believes this isn’t a trade war—yet.
