The return of Donald Trump as US President has seen the imposition of sweeping tariffs on goods entering the world’s largest economy, with India facing a penal tariff of 25% for its import of Russian oil and arms on top of a reciprocal tariff of 25%. Trump wants to erase the US’ trade deficit with its partners and has looked to strike favourable bilateral agreements that include promises of investment in domestic manufacturing capacities in exchange for lower tariffs. India, which enjoyed a significant merchandise trade surplus of $41 billion with the US in 2024-25 as per commerce ministry data, was one of the first countries to begin talks with the US over a trade deal. However, negotiations are still continuing. In the meantime, exporters are faced with higher tariffs. Last week marked six months since the reciprocal tariffs first came into effect on April 2 — or what the Trump administration called Liberation Day — before they were temporarily suspended for 90 days. To better understand the developments since then and what explains them, The Indian Express has invited Sajjid Chinoy, Managing Director and Chief Asia Economist at J P Morgan, for an Explained.Live session on Thursday. He will be in conversation with Siddharth Upasani, Deputy Associate Editor, The Indian Express. In addition to his responsibilities at J P Morgan, Chinoy is also a part-time member of the Economic Advisory Council to the Prime Minister and has previously served on crucial committees, including the RBI’s expert committee to revise and strengthen the monetary policy framework that was led by Urjit Patel, then a deputy governor of the central bank. Chinoy has in the past also worked at the IMF, among other organisations. The imposition of tariffs by the Trump administration has upended a global order that seemingly worked well for decades. Now, countries around the world – including India – are grappling with the fallout of their goods potentially becoming more expensive when purchased in the US. But have prices risen for American consumers because of the tariffs and are they suffering from lower disposable incomes? Or is there no inflation in the US, like Trump has repeatedly said. Closer home, until a bilateral trade agreement with the US is finalised, India must live with the impact of the cumulative 50 per cent tariff on its goods. This will require work from the government to mitigate the pain felt by certain sectors in particular and the consequences for the domestic labour market. And even after a trade deal is struck, the government and Indian companies will need to constantly be on alert in a world that has increasingly become more and more protectionist and inward-looking. Explained.Live is a unique series of explanatory conversations that The Indian Express hosts from time to time.
