Can India retaliate against Trump’s 50% tariffs?
SEPT 4 - US President Donald Trump's 50% tariffs on India came into effect on 27 August. So far, rather than retaliating, India has put forth a carefully Kenya breaking news | Kenya news today |..
✨ Key Highlights
US President Donald Trump's 50% tariffs on India, effective August 27, have put Delhi in a difficult position. India has responded with geopolitical signaling rather than direct retaliation, as the tariffs threaten significant economic repercussions.
- Prolonged 50% tariffs could reduce India's GDP by as much as 0.8%.
- India's exports to the US could drop by up to $35 billion (£26.1 billion) this financial year, risking hundreds of thousands of jobs in key industries.
- Experts advise against retaliation, citing India's greater economic dependence on the US, with India's goods exports to the US ($86 billion) being nearly three times higher than US goods exports to India.
- India is exploring options like diversifying export markets and strengthening trade ties with countries like Mexico, Canada, and those in Europe and Latin America, while accelerating other trade pacts like the India-EU free trade deal.
- US Commerce Secretary Howard Lutnick has warned of potential changes to H1B non-immigrant visas, 70% of which are used by Indians, indicating the impact of tense geopolitical ties extends beyond trade.
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India and Ethiopia Adjust National Tax Policies Amid Trade and Economic Pressures - September 2025
India has significantly cut taxes on hundreds of goods by simplifying its Goods and Services Tax (GST) structure into two main slabs of 5% and 18%, effective September 22. This policy change is aimed at boosting domestic consumption and mitigating the potential economic impact of steep 50% US tariffs imposed by President Donald Trump, which became effective on August 27. The US tariffs have put Delhi in a difficult position, leading to geopolitical signaling rather than direct retaliation. In a separate move to increase government revenue, Ethiopia has broadened its Value Added Tax (VAT) system through Directive No. 1104/2025. The new regulations mandate more businesses and professionals to register for VAT, a move designed to boost compliance and expand the nation's tax base.
