The European Union managed to catch a breather as US President Trump’s delayed the imposition of 50 percent tariff till July 9, but higher levies on the single-currency bloc stand to threaten nearly 55 percent of its exports to America. However, a Moneycontrol analysis shows that India stands to gain as much as $13.8 billion in imports, owing to higher tariffs on the EU.
While Trump’s tariffs would do little to dent the $305 billion of EU exports headed to the US, it would leave the currency bloc exposed in rest of the domains.
EU exported $686 billion worth of goods to the US in 2024, of which it had more than half the share in the US market in $305 billion worth of products. For instance, in vaccines, serums - which are $50 billion worth of EU products headed to USA – the European Union had a 68.3 percent share in US imports.
The share in select medications worth $41 billion of imports was 51 percent, while the bloc had a 95 percent share in US’ imports of polypeptides and protein hormones.
Among the nearly 5,500 items of imported by the US under six-digit HS code, Europe had a dominant position or 50 percent share in 1,037 categories.
US President Trump on May 23 had announced over 50 percent tariff on imports from the European Union starting June 1, but delayed the deadline after assurances from the European Commission President Ursula von der Leyen to fast-track trade negotiations.
“I received a call today from Ursula von der Leyen, President of the European Commission, requesting an extension on the June 1st deadline on the 50% Tariff with respect to Trade and the European Union,” the US President wrote on his social media platform on May 25.
The 50% duty shall now kick in from July 9, when the 90-day deadline for Trump’s flat 10 percent tariff ends and new reciprocal duties kick in.
Can India Benefit?
While the benefit of higher tariffs on the EU would mostly accrue to China, Canada and Mexico, India too could gain at least $13.8 billion in trade on paper.
While the EU outranks India in most of exports headed to the US, in 644 tariff lines India’s exports to the US were higher than that of the EU. If New Delhi were to ramp up its trade in these categories alone, it could take away $8.5 billion from the currency union.
In the case of tractor tyres, India could corner the $106 million market from the EU, whereas it could also take away $1.8 billion worth of diamond exports away from the EU.
India exported $6.9 billion worth of diamonds to the US in 2024.
Another $5.3 billion could come in areas where India’s trade was less than 30 percent below the trade from the European Union.
EU exported $3.6 billion worth of jewellery to the US in 2024, while India’s exports were lower at $3.1 billion.
India is amid negotiations with the US to sign a bilateral trade agreement that would give the country an advantage over other nations to do more trade with the United States.
In 2024, India exported $91 billion worth of products to the US.
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