Reciprocal tariffs: Brazil, India, Vietnam face 'high risk' of Trump's actions, says Fitch

India, Vietnam and Brazil to face ire of US reciprocal tariffs

Emerging economies such as India, Brazil and Vietnam, which impose tariff on US imports higher than what US them, are likely to draw the ire of US President Trump, global ratings agency Fitch said on March 28.

“There is a high risk that tariffs ensnare many US trading partners, particularly those emerging market economies where the tariff rates faced by US exporters exceed those charged on US imports from these countries,” a fitch report said, highlighting that tariffs in these economies were higher, both on a simple as well as trade-weighted average basis.

The tariff differential between the US and India was 3.8 percentage points on a trade-weighted basis and 8.7 percentage points on a simple average basis. India charges a simple average tariff of 12.4 percent on US products, while US charges 3.7 percent on Indian imports.

“On a simple average basis, the highest differentials are in Brazil, India and Turkey,” Fitch said.

Brazil’s differential was 10 percent, while Turkey was 8.8 percent.

In terms of categories, food products had the highest tariff differential of 40 percent between India and the US, followed by animal products, stone and glass, from a trade-weighted basis.

On textiles, tariffs charged by the US were higher, and the differential was a negative 1.6 percent.

Consumer and intermediate goods too had a higher tariff differential.

India runs a trade surplus worth $44 billion with the US, which has been a concern for President Trump, who has been pushing India to lower the barriers of face the threat of reciprocal tariffs, which will kick in from April 2.

“Six of the largest trading partners of the US (Canada, Mexico, Australia, Chile, Japan and South Korea) maintain free trade agreements with the US, significantly lowering bilateral applied tariff rates and effectively reducing the aggregate differential to minimal levels,” Fitch report said.

India has been negotiating a bilateral trade deal with the US to escape reciprocal tariffs, with American trade representatives in Delhi for negotiations during March 25-29.