The new U.S. trade policy, announced by President Donald Trump on Wednesday, will introduce differentiated tariff rates based on the type of goods and their country of origin, according to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI).
Key Highlights of the New Tariff Structure:
- Zero-Tariff Goods
- Essential and strategic goods such as pharmaceuticals, semiconductors, copper, and energy products (oil, gas, coal, LNG) will be exempt from new tariffs.
- Low-value shipments under USD 800 (mainly e-commerce orders) will continue to be taxed at old tariff rates.
- 25% Tariff on Key Industrial Sectors
- A 25% tariff will be imposed on major industrial goods, including aluminum, steel, automobiles, and auto parts, applicable to most countries.
- Two-Tier Tariff System for Other Goods
- Phase 1: Starting April 5, 2025, all imports will face a 10% baseline tariff.
- Phase 2: From April 9, 2025, some countries will be subject to higher country-specific tariffs, replacing the baseline tariffs.
- India’s exports (except pharmaceuticals, semiconductors, copper, and energy products) could face tariffs as high as 27%.
“The actual tariff a country faces depends on what it’s exporting and how its trade policies align with U.S. economic and national security interests,” said Ajay Srivastava.
The Executive Order – Section 2 of the Reciprocal Tariff Policy states:
“An additional 10% duty will be imposed on all imports initially. Shortly thereafter, countries listed in Annex I will face higher tariffs at specified rates. These duties will remain in effect until underlying trade conditions are deemed resolved or mitigated.”
As the new tariff policy takes effect, global trade dynamics are set to shift, with businesses and governments closely watching its long-term impact on exports, pricing, and supply chains.