Sat Feb 15 18:27:24 UTC 2025: ## Trump’s “Reciprocal” Tariffs to Hit India, Brazil Hardest: Economists Warn

**Washington D.C.** – President Donald Trump’s new policy of imposing reciprocal tariffs on countries with high import duties is expected to significantly impact India and Brazil, according to economic analysts. The plan, announced following a meeting with Prime Minister Narendra Modi, aims to match tariffs levied by other nations on US goods.

Trump defended the policy, stating, “Whatever they charge us, we’re charging them. It’s a beautiful, simple system.” However, research firm Capital Economics warns this “simple system” will disproportionately affect India and Brazil, which face the highest potential tariff increases.

The policy, formalized in a February 13th memorandum, directs the US Commerce Secretary to review and recommend reciprocal tariffs by April. China, Vietnam, and Thailand are also expected to face substantial tariff hikes. This action could lead to higher prices for foreign goods in the US.

India’s vulnerability stems from varying tariffs across industries. Sectors like animal products (30.2% tariff gap), food, footwear, textiles, and transportation equipment are particularly exposed. Capital Economics highlights the existing trade imbalance: the US had a $1.2 trillion goods deficit with the world in 2024, while accounting for 17.7% of India’s exports but only 2.7% of US imports.

This approach contrasts with previous US trade strategies focused on tariff reduction. The White House plans to tailor tariffs based on individual trading partners, considering factors like subsidies, regulations, and digital taxes. The inclusion of Value-Added Tax (VAT) in the calculation, despite its generally neutral nature, is justified by Trump advisor Peter Navarro as unfairly disadvantaging US goods due to lower US state-level sales taxes.

The move has sparked concern that retaliatory measures from affected countries could increase prices for US consumers and exacerbate global trade tensions. Capital Economics warns of precisely this outcome, stressing the potential for increased costs and escalating trade disputes. This policy follows Trump’s previous actions against India, including revoking its preferential trading partner status and raising tariffs on steel and aluminum.

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