A lifetime ago (or so it seems), First Buddy Elon Musk thought that “reciprocal tariffs” were a great idea: zero tariffs on all sides, starting with the EU, more trade, and all happy. The only problem? The far less well-known Trump acolyte Peter Navarro had different ideas. The day after Vietnam offered zero tariffs, he dismissed it, raking up a separate issue—transhipment. Trumper tantrums
Today, Elon Musk is no longer First Buddy, but Navarro remains, along with other bureaucrats like Stephen Miller, who held India responsible for financing Russia’s War of Ukraine (never mind that the US has been equally culpable for bankrolling Israel in Gaza). So instead of “reciprocal tariffs”, we just have “tariffs everywhere.”
India seems rather blasé about all this though.The reason is that the impact of the tariffs to GDP will only be in the 0.3% range, which will barely make a dent on its expected 6.5% growth. In fact, the US has done such a good job of defying Dale Carnegie and making enemies and alienating people that the impact on its own GDP is expected to be no less than 6%. This has already started to be reflected in the shockingly poor jobs report on Aug 2.
The following table shows the ten biggest export sectors for India in 2024, with core data coming from here:
It is clear from this table that given the tariffs on competitor countries, the impact of tariffs on India is minimal. Of course, this could change if Trump follows through on his threat to charge an additional 100% tariff on countries that buy Russian oil, or on BRICS members, but that remains to be seen. Trumper tantrums
For now, the numbers do not lie: India is not just a major trading partner of the US. It controls almost 50% of the American pharmaceutical market. Along with China, Japan, and Germany, its nominal competitors, it sells electrical, electronic, and nuclear machinery that are simply not made in the US. So, for the most part, importers will just pay the tariffs and pass on the costs to their customers.
Who gets hurt the most from the president’s Trumper tantrums? The jobs report reflects the employment side of the story. On the pricing side, the recent post-Covid inflation rates have averaged almost 5% which is almost three times the rate between 2010 and 2020. The Trump administration’s aggressive tariff strategy seems to have failed to achieve its intended goals of resetting trade, boosting domestic revenue, or reshoring manufacturing. Instead, the result has been economic disruption, diplomatic fallout, and the looming threat of a self-inflicted recession. As the data clearly shows, India—one of the targets of these tariff measures—is relatively insulated from significant economic damage. In contrast, the US economy faces a far steeper cost, amid clear signs of labour market deterioration.
Statement by Official Spokesperson⬇️
🔗 https://t.co/O2hJTOZBby pic.twitter.com/RTQ2beJC0W— Randhir Jaiswal (@MEAIndia) August 4, 2025
Moreover, the competitive landscape in India’s favour only reinforces the limited utility of these tariffs. Many of India’s export categories—including pharmaceuticals, electronics, and textiles—face equal or higher tariffs in rival countries like China, Germany, and Mexico. In critical sectors such as pharmaceuticals, where India controls nearly half the US market, there is no viable substitute. The tariffs thus amount to little more than a tax on American importers and consumers, who will ultimately absorb these additional costs.
The broader picture is one of strategic incoherence. While Trump’s rhetoric positions tariffs as a tool of economic nationalism, the practical consequences reveal a policy untethered from economic logic or geopolitical balance. By antagonising trading partners across Asia and Europe—under opportunistic justifications like “trans-shipment” or “funding foreign wars”—the US risks isolating itself from vital supply chains. If the administration follows through with further measures, the blowback could be even more severe. By not overreacting and staying its course, India’s restrained and pragmatic response may serve as a case study in resilience against erratic trade policy. Trumper tantrums
Read more: When small men cast long shadows
