US President Donald Trump imposed high tariffs of up to 50% on countries like India and Brazil, including a staggering 100% tariff on imports of branded and patented pharmaceutical drugs, aiming to boost American manufacturing and improve the trade balance. However, Harvard Economics Professor and former IMF Chief Economist Gita Gopinath recently evaluated the impact of these tariffs and gave a "negative verdict". She said that six months after their implementation, the tariffs had brought little to no benefit to the US economy.
In a post on X (formerly Twitter), Gopinath stated: "It is six months since the 'Liberation Day' tariffs. What have US tariffs accomplished?
1. Raise revenue for government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers. So it has worked like a tax on US firms/consumers.
2. Raise inflation? Yes, by small amounts overall. More substantially for household appliances, furniture, coffee.
3. Improve trade balance? No sign yet of that.
4. Improve US manufacturing? No sign yet of that.
Overall, the scorecard is negative."
Meanwhile, several experts have raised concerns over Donald Trump's aggressive tariff policy. On October 4, JNU Professor and China studies expert Srikanth Kondapalli stated that Trump's decision to impose tariffs on Indian goods was likely driven by "egoistic reasons."
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"If Trump's ire is on the trade surpluses, it should actually be directed at China, not at India. India is a sideshow for all these, and it probably got activated due to personal egoistic reasons, on the Nobel Prize or the ceasefire. So we were in a very strange situation," the professor told ANI in an interview.
Bhaskar Chakravorti, the Dean of Global Business at The Fletcher School of Law and Diplomacy at Tufts University, said that Trump's decision to impose 100 per cent tariffs on pharmaceuticals won't impact India, at least for now. Chakravorti argued that he wouldn't "rule out" tariffs on Indian generic pharmaceuticals in future.
"This specific move to put tariffs on patented pharmaceuticals is not something that is directly going to affect the Indian manufacturers as much, but it's coming awfully close. So, I wouldn't rule out somewhere down the road, tariffs on generic pharmaceuticals as well," he added.
(With inputs from agencies)
