reciprocal tariff

The U.S. reciprocal tariffs on China are set to cause major disruptions to global supply chains, forcing American companies to explore alternative suppliers. Electronics is one of the key sectors for India to gain with India's exports valued at nearly USD 14 Bn.

The Indian government is evaluating the impact of Pakistan's airspace closure on air cargo to key destinations, but exporters anticipate minimal disruption due to the small percentage of goods transported by air. A ban on cargo transshipments from Bangladesh is expected to stabilize prices, while previous tariff deadlines led to shipment surges, particularly in garments and electronics.

Apple dramatically increased iPhone exports from India to the US in March 2025, reaching 97.6% of total exports, driven by concerns over potential tariffs on Chinese goods. This shift involves expanding Indian production with manufacturers like Tata Electronics and Foxconn, aiming for a complete transition of US-bound iPhone production from China to India by 2026.

India may soon be the first nation to strike a bilateral trade deal with the US under President Trump's reciprocal tariff policy, according to US Treasury Secretary Scott Bessent. Negotiations are reportedly near a breakthrough, facilitated by India's relatively low tariffs and minimal trade barriers.

Indian trade negotiators are heading to Washington D.C. to explore an "early tranche" deal, potentially addressing a limited set of issues to expedite negotiations with the U.S. Both countries aim to finalize the agreement quickly, possibly before the fall deadline, while navigating regulatory hurdles like digital tax and reciprocal tariffs. Clarity is expected during U.S.

Deloitte projects India's economy to grow at 6.6% in FY26, balancing domestic stimulus with global trade challenges. Tax cuts are expected to boost consumer spending, while trade uncertainties, particularly tariffs with the US, pose a risk. The nation's economic outlook depends on navigating trade relations and stimulating consumer demand.

The Indian government is considering offering duty-free access to specific US automobiles, including bikes with large engines, contingent on securing a favorable bilateral trade agreement. This potential concession, possibly with quotas, aims to address US pressure to lower tariffs on automobiles, whiskey, and farm products.

Prime Minister Modi took a dig at the INDIA bloc during the Vizhinjam International Seaport inauguration, while JD Vance signaled a shift in India-US trade dynamics, acknowledging Modi as a tough negotiator. Simultaneously, Donald Trump announced plans to revoke Harvard's tax benefits, and a Delhi court issued notices to Sonia and Rahul Gandhi in the National Herald case.

Despite geopolitical tensions, the BSE Sensex saw a nearly 4% increase in April, fueled by foreign investment, monsoon forecasts, and trade agreement prospects. Attractive valuations and RBI rate cuts further boosted market sentiment. While Q4 earnings and global cues will influence future performance, analysts remain optimistic about the long-term outlook.

President Trump claimed to have spoken with Xi Jinping "numerous times" regarding trade negotiations, aiming to reassure unsettled financial markets amidst the ongoing trade war with China. However, Chinese officials refuted Trump's assertions, stating that no tariff consultations or negotiations had taken place between the two countries.

President Trump indicated that tariff discussions with India are progressing positively, raising hopes for a potential agreement. Both nations are actively pursuing "early mutual wins" to finalize key aspects of the bilateral trade agreement by the Fall of 2025. Discussions have already commenced, with further in-person sectoral engagements planned for late May to achieve tangible outcomes before the deadline.

Unilever is set to invest $1.5 billion in Mexico, creating 1,200 jobs, amidst rising trade tensions between the U.S. and Mexico. This announcement follows similar investment pledges from Walmart, Amazon, and other global companies, signaling growing international confidence in Mexico's economy. President Sheinbaum and Donald Trump agreed to collaborate on improving trade balance.

Mexico has responded to the US administration's threat to restrict livestock imports due to a dispute over screwworm fly control. US Agriculture Secretary warned of import restrictions if Mexico doesn't improve its efforts by Wednesday. The US alleges that Mexico is limiting sterile fly release operations and imposing duties on necessary aviation parts.

Amazon has dismissed a proposal to display US tariff-related price increases to customers, following criticism from the White House. The plan, which would have indicated the impact of Trump's tariffs on product prices, was deemed a "hostile and political act." UPS also announced a significant workforce reduction due to a changing trade environment and declining business from Amazon.

China urges the US to completely eliminate reciprocal tariffs imposed during the Trump administration, which have escalated to 145%. Describing the recent tariff exemption on consumer electronics as a "small step," China is assessing the overall impact. Businesses are increasingly concerned about the sustainability of US-China trade relations due to these escalating tensions and retaliatory levies.

S&P Global Ratings has revised down the US GDP growth forecast for 2025 to 1.5% and 2026 to 1.7%, citing uncertainties from reciprocal tariffs announced by the US. While anticipating a slowdown, S&P doesn't foresee a US recession, but acknowledges downside risks due to potential tariff impacts on the real economy and global trade.

Apple reported strong first-quarter profits, but CEO Tim Cook cautioned about US tariffs potentially costing the company $900 million this quarter. To mitigate this, Apple is shifting production, with most iPhones sold in the US originating from India. "We are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter," news agency Reuters quoted Tim Cook as saying.