Reciprocal Tariffs announced by the US President | Current Affairs | Vision IAS
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Reciprocal Tariffs announced by the US President

Posted 04 Apr 2025

2 min read

While announcing the reciprocal tariffs, the President of the US announced country-specific new tariffs for more than 180 countries/ economies, with the imposition of a 10% baseline tariff.

  • Announcement includes 26% reciprocal tariff on India—half the rate India imposes on US imports.
    • Reciprocal tariffs aim to counter trade imbalances by imposing higher tariffs on countries with which the importing country runs a trade deficit.
  • Similar reciprocal tariffs imposed on other major economies include China (34%), Japan (24%), the EU (20%), among others.

Reasons for Reciprocal Tariff

  • Major reasons announced are reindustrialization and retaliation against unfair trade practices.
  • It is a part of the backlash against hyper globalization and the rise of Economic Nationalism.
    • Economic Nationalism is visible in manufacturing onshoring policies, Make America Wealthy Again promises, etc.

Economic Nationalism

  • It is an economic ideology which favours domestic control of economy, labour and capital formation. 
  • Two form:
    • Developmentalism: It uses industrial policy to shape national development goals. E.g., planned economic model adopted in India post-independence period.
    • Mercantilism or isolationism: It seeks to increase the prosperity and power of a nation through restrictive trade practices. E.g., the recent US Administration’s America First policy.
  • Tags :
  • Economic Nationalism
  • Reciprocal Tariff
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