The mixed 50% tariff on Indian exports to the U.S. will reduce demand for Indian items “very substantially”, Moody’s Analytics stated in a report.
The report was speaking about the mixed impact of the ongoing 25% tariff on Indian imports imposed by U.S. President Donald Trump, in addition to the secondary tariff of 25% he imposed for India’s financial dealings with Russia, that are set to come into drive on August 27.
“India has experienced a sudden deterioration in its relations with the U.S. and has been threatened with 50% tariffs, a rate that will reduce demand for Indian goods very substantially,” the report stated.
It added that the tariffs imposed by the U.S. have left international locations throughout Europe and the Asia-Pacific area “feeling bruised” since the U.S. is the largest buying and selling associate for many of them, and a decline in gross sales to their largest buyer “will hurt”.
“Some firms in these countries may be willing to slash prices to maintain volumes, but this will affect firm performance through lower margins, a squeeze on wages and investment,” Moody’s Analytics added.
“Given that we now expect tariffs to remain in place for the remainder of Trump’s presidency, the drag on growth, particularly on investments and exports, will be notable,” it stated.
