India-US trade deal in danger! Donald Trump explodes 126% tariff bomb, India-Indonesia will be most affected
India-US Trade Deal: After the defeat in the US Supreme Court on Tariff, President Donald Trump is giving big blows one after the other. Now his eyes are on solar energy sector. Donald Trump has decided to impose 126 percent tariff on solar imports from India. This step of the US President may put the India-US trade deal in danger. Final negotiations are going on between the two countries regarding the trade deal.
This decision has come at a time when New Delhi and Washington had decided the framework of the India-US trade agreement a few weeks ago. There was a provision to reduce the earlier tariff on Indian exports from 50 percent to 18 percent. Earlier, the US Supreme Court had declared Donald Trump’s old tariffs unconstitutional.
The US Commerce Department imposed the tariffs because it felt India unfairly subsidized its domestic solar panel manufacturing, making Indian products cheaper than American manufacturers. Apart from this, the department fixed the initial duty at 86 to 143 percent for Indonesia and 81 percent for Laos.
Why did America take this step?
According to Bloomberg report, the US Commerce Department has set an initial duty of 126% on the import of solar energy products from India. Whereas for Indonesia this initial fee has been fixed at 86% to 143%, while for Laos it has been fixed at 81%. These import duty rates have been determined keeping in mind foreign subsidies. The US believes that this allows exporters from these countries to sell their products at lower prices than the products of domestic solar energy producers. This move by the Trump administration to impose heavy tariffs is aimed at benefiting domestic manufacturers.
Where and how will it affect India?
The direct impact of the US increasing the import duty on Solar Energy Products by about 126% can be seen on Indian exports related to this sector and the shares of companies related to it. According to reports, if we look at the data of the Commerce Department, the value of solar energy imports by America from India in the year 2024 was $ 792.6 million and there was a huge jump in it as compared to the last few years. Those are the three countries which Trump has targeted. Last year, solar energy products worth about $4.5 billion were imported from these countries.
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