Escalating Tariff Tensions: US Targets Emerging Markets with Reciprocal Plans

The US plans to impose reciprocal tariffs on trading partners from April 2, targeting countries with higher tariffs on US exports than their imports. Emerging markets like India and Brazil face risks. Meanwhile, US and India are negotiating a comprehensive trade agreement for balanced bilateral ties.

Emerging markets trading with the United States brace for potential economic disruption as the Trump administration signals the implementation of reciprocal tariffs starting April 2. According to a report by Fitch Ratings, there is a substantial risk for countries with higher tariffs on US exports than those imposed by the US on their imports.

The ratings agency highlighted nations such as India, Brazil, and others in Southeast Asia, where discrepancies in tariff rates could trigger retaliatory measures under Trump's 'Fair and Reciprocal Plan.' The administration remains firm on aligning tariffs proportionately with those of trading partners, aiming at a more balanced trade environment.

Despite imminent tariff adjustments, the US and India engage in broader trade discussions. Indian Commerce Minister Piyush Goyal's recent US visit underscores efforts to forge a comprehensive Bilateral Trade Agreement by 2025. The ongoing diplomacy seeks to harmonize trade practices and foster economic cooperation beyond individual sectors.

(With inputs from agencies.)