1.US Reciprocal Tariffs Policy (Trade Policy)
What & Where
Concept: US “Reciprocal Tariff” taxes imports at the same rate foreign nations levy on US exports
Scope: Applied by USA on all partners, allies included; removes WTO-style developing-nation concessions
Timeline: Full tariff schedule to be finalised by US Trade Department by April 2025
Quick Facts for MCQs
Legal & Policy
- WTO-norm shift; eliminates “special & differential” treatment for developing countries
- Tariff matching includes calculation of partner’s explicit and implicit subsidies
- Policy announced by US President; intends uniform global tariff environment
Economic Angle
- Export-cost surge for subsidy-heavy economies raises landed price, cuts competitiveness
- Import rise from US (oil, defence kits) expected to narrow partner surplus
- Currency pressure: higher import bill may weaken partner currencies, raising inflation
India-Specific Effects
- Competitiveness hit: textile, pharma, auto-component exports face tariff spikes
- Trade-balance realignment: India may boost US purchases to offset duty hike
- FDI prospect: US firms likely to localise production in India to bypass new tariffs
Key Data Points
| Feature | Data-Point |
|---|---|
| Tariff basis | Mirror of partner’s duty plus subsidy offsets |
| Assessing body | US Trade Department |
| Subsidy elements counted | Tax breaks, export incentives, indirect support |
| Key Indian sectors hit | Textiles, pharmaceuticals, auto parts |
| Deadline for rates | April 2025 |
| India–US trade surplus (FY23) | ≈ US $38 billion |
| Possible rupee effect | Depreciation via higher dollar demand |







