US President Donald Trump has announced a major shift in trade policy, stating that the US will begin sending letters to over 170 countries, specifying new reciprocal tariff rates on their exports to the US. This move, described as a “simple deal,” aims to replace lengthy, complex negotiations with a standardized approach, where each country is informed of the tariffs they will face—potentially ranging from 20% to 35% for most major trading partners.
Adding that the US intends to start by dispatching around 10 letters per day. A deadline of July 9 has been set for countries to finalize trade agreements before the new tariffs take effect.
For India, this announcement comes at a critical juncture, as the much-anticipated interim trade deal with the US is still under negotiation. Key sticking points include US demands for greater access to India’s agricultural and dairy sectors, while India seeks better terms for its own exports. If no agreement is reached by the deadline, Indian exports to the US could face a 26% reciprocal tariff, which would significantly impact sectors like textiles, pharmaceuticals, and engineering goods—potentially harming India’s export competitiveness.
This new US approach is already sending ripples through global trade, with steep tariffs announced for several Asian countries—such as 36% on Thailand, 32% on Indonesia and Taiwan, and 24% on Japan and Malaysia. The move has created uncertainty for global supply chains and puts additional pressure on countries like India to make concessions or risk losing access to the lucrative US market.
As the deadline approaches, all eyes are on the outcome of the India-US negotiations and the broader impact of these sweeping tariff changes on international trade.