Understanding Tariffs: What They Are And How They Impact Global Trade, Consumer Prices & Economic Growth | World News
New Delhi: The United States brought up to 50 percent tariffs to goods imported from India. Half of this tariff (25 percent) is already in force, while the remaining 25 percent will enter into force as of August 27th. This movement comes after concerns about the acquisition of Russian oil, which the US President Donald Trump claims to support Russia’s war in Ukraine. India rejects these claims by emphasizing that many European countries, including the US itself, continue to trade with Russia.
An executive order signed by Trump states that additional tariffs will enter into force 21 days after the export. India condemned the decision of the Ministry of Foreign Affairs unjustly and unjustly. The White House insists that India imports Russian oil directly or indirectly.
What is the tariff?
The tariff is a tax from goods imported to a country and calculated as the percentage of the value of the product. For example, a 10 percent tariff means that a product priced as 100 RS will receive an additional RS 10 tax and increase its price to 110 RS.
Tariffs are paid by importing companies, not exporters. For example, if the price is 25 percent, a US company that imports a $ 50,000 car must pay a $ 12,500 tariff.
Companies usually increase prices and transfer these costs to consumers. As the tariffs rise, imported goods become more expensive and reduce demand.
As a result, American consumers can buy less products to direct companies to search for cheaper alternatives or to import less.
In May, a US Commercial Court questioned whether Trump has the authority to apply most of these tariffs within the scope of national emergency powers. The Court of Appeal then allowed the tariffs to remain in reality waiting for a final decision.
Why is the tariff applied?
Tariffs aim to encourage domestic purchase by making imported goods more expensive. Additional income also supports government expenditures.
Trump often claimed that tariffs maintain and create American businesses, and the US trade deficit reduces the gap between imports and exports. He claims that other countries have an unfair advantage from the USA.
Global Economic Changes
Economists see tariffs as part of a wider strategy to reshape global trade. They say the goal of reducing the trading surplus, which Trump describes as “robbing America ında in countries such as China and Europe.
Steel and aluminum tariffs introduced in 2018 are advocated for national security reasons, given the importance of these metals for defense industries.
Who is the most affected?
Following the end of a trade agreement on August 1, Trump announced tariffs in more than 90 countries, including BRICS countries. Brazil is facing a 50 percent tariff, South Africa and China are subject to 30 percent.
Among the remarkable tariffs are 50% in steel and aluminum, 50% in copper (August 1 August) and 25% in imported cars and parts.
Although the details were uncertain, tariffs up to 200 percent were threatened in pharmaceutical imports. Exemption for products that are priced below $ 800 ended on August 29th.
Tariffs for the Country
Most of the tariffs started on April 2 and started with a 10 percent base line in all imports. Among the existing rates – Brazil: 50%, South Africa: 30%, Vietnam: 20%, Philippines: 19%, Japan: 15%and South Korea: 15%.
India faces 25 percent more tariffs due to Russian oil imports and increases its total to 50 percent.
Exceptions, trade agreements
The European Union (EU) negotiated an agreement before the last date and has accepted a 15 percent tariff on cars and some goods since the end of July.
Some US companies benefit from access to zero officials in EU markets. The UK adopted 10 percent of the lowest US tariff rate.
Impact on Markets
Tariff announcements triggered volatility on global exchanges and many companies sold shares. Although markets are a bit stabilized, fluctuations affect worldwide pensions, jobs and interest rates.
Usually stable, US dollar experienced a significant decrease. Organizations such as Fund (IMF) and Economic Cooperation and Development Organization (OECD) to the International Museum envisage more slow global economic growth due to tariffs.
Between April and June 2025, the US economy is expected to face significant difficulties despite the annual growth of 3 percent.
Increased costs for our consumers
Tariffs contributed to the increasing inflation in the US and rose from 2.4 percent to 2.7. Prices rose for clothing, coffee, toys and electronics.
Companies like Adidas confirmed price increases due to tariffs. More than half of Adidas products come from Vietnam and Indonesia, where tariffs range from 19 to 20 percent.
Nike warned that tariffs can add a cost of $ 1 billion and possibly lead to higher prices for American shoppers.
Some companies import less foreign goods, tighten the supply and increase prices further.
Even American products connected to imported parts are affected. For example, automotive components pass through multiple boundaries before the final assembly in the United States, Mexico or Canada. New tariffs and more strict customs controls slow down supply chains, add delays and costs.
