U.S. Implements Sweeping Tariff Policy; India Faces 26% Tariff, China’s Total Tariff Reaches 54%

The United States has introduced a significant overhaul of its trade policies, imposing new tariffs on multiple countries as part of a broader economic strategy. Under the latest measures, India will face a 26% tariff on its exports to the U.S., while China’s cumulative tariff rate has now risen to 54% following an additional 34% duty.

U.S. President Donald Trump had pledged a 60% tariff on Chinese goods during his 2024 campaign, and the latest move is seen as a step toward that goal. The policy introduces a 10% baseline tariff on all imports, with higher penalties for nations deemed to have restrictive trade practices. Notable tariff rates include:

• Vietnam: 45%

• Thailand: 36%

• Taiwan: 32%

• Japan: 24%

• South Korea: 25%

• European Union: 20%

Meanwhile, Canada and Mexico remain exempt from reciprocal tariffs under the United States-Mexico-Canada Agreement (USMCA). However, a 10% tariff on Canadian energy and potash remains in effect, alongside earlier fentanyl-related duties. The exemption will continue unless the U.S. revokes its fentanyl-related tariffs, in which case a 12% duty will apply to non-USMCA-compliant imports.

Understanding Reciprocal Tariffs

A reciprocal tariff refers to a trade policy where one country imposes tariffs in response to similar trade barriers set by another country. These measures aim to counter unfair trade practices, such as currency manipulation, weak labor and environmental standards, and restrictive import regulations. The U.S. has justified the new tariffs by citing the persistent trade deficit exceeding $1.2 trillion in 2024, arguing that unfair trade policies have weakened its domestic manufacturing sector.

Additionally, the U.S. has permanently ended the duty-free exemption (de minimis rule) for packages under $800 from China and Hong Kong, previously used by Chinese e-commerce companies to bypass tariffs. The exemption’s removal is part of an effort to tighten trade enforcement and address concerns about illicit shipments.

The 10% baseline tariff takes effect on April 5, followed by the higher reciprocal tariffs on April 9. These measures mark a significant shift in U.S. trade policy, with long-term implications for global trade relationships and economic stability.