Steep tariff hikes reshape trade flows
In April the US imposed 10% additional tariffs on all imports from trade partners. From August 7 this duty was raised to 25%. By August 27 the suits had gone up to 50%.
Some products have special tariffs that apply to all countries. Steel. Aluminium, auto components and copper have 50% tariffs for all partners.
In tariff exempt items the exports dropped 41.93% to $ 1.96 billion in August from $ 3.37 billion in May. This includes smartphones, pharma and petroleum products.
The products that have the same tariffs for all countries the decline was 4.04% to $ 0.60 billion in August from $ 0.63 billion. These include iron, steel, aluminium, copper and auto components.
On other products like textiles, gems and jewellery, chemicals that have seen the maximum tariff changes the exports have dropped 10.80% to $ 4.30 billion in August from $ 4.82 billion in May.
Exempt sectors face puzzling collapse
“Tariff-Exempt Exports Collapse is a Puzzle. It is alarming and counterintuitive — these products face zero U.S. tariffs, yet they have seen the steepest decline. This demands urgent investigation to uncover the real reasons that are driving the fall,” GTRI’s founder Ajay Srivastava said.
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August data only partly reflects the impact of higher tariffs — India paid 10% tariffs until August 6, 25% until August 27, and 50% only after August 28. India’s exports to the U.S. have fallen for a third straight month — a predictable outcome of steep tariffs
“September will be the first full month where the majority of exports face 50% tariffs, meaning the declines in textiles, gems and jewellery, shrimp, chemicals, and solar panels could deepen further,” he added.