Mumbai: Trump’s announcement of tariffs has caused significant disruptions in global stock markets, leading to sharp declines among major indices. On the first trading day of this week alone, Indian stock markets experienced substantial losses, with the Sensex falling by over 3,000 points and the Nifty dropping nearly 900 points, respectively.
Furthermore, this week is particularly significant, as key announcements will take place, such as the Reserve Bank of India’s bimonthly monetary policy review as well as Tata Consultancy Services (TCS) officially reporting quarterly earnings results.
The market crash has severely impacted investors. Within minutes, Indian investors saw losses exceeding Rs19 lakh crore. At Friday’s close of trading, BSE’s market capitalisation was worth Rs4,03,34,886.46 crore but by Monday at 9:20 AM, this amount had decreased drastically, reflecting an astounding loss of nearly Rs 19.39 lakh crore – this amount may only grow larger as trading continues.
The U.S. tariff announcement has caused havoc across global markets, including India. Australia, Japan and Taiwan all experienced notable market declines following this announcement: the Australian market dropped 6.4%; the Singaporean exchange declined over 7% while the Hong Kong Hang Seng Index experienced a notable dip of 9.28%; and Japanese stock markets crashed nearly 20% while Taiwan experienced 15% losses.
Asked by President Trump about market instability, market fluctuations and tariff retaliations, President Trump stated, “I don’t wish for anything to fall apart; however, sometimes necessary steps must be taken to make things right again.
Types of Tariffs: Bound Tariff – the highest import duty rate is included as the Bound Tariff rate.
Preferential Tariff – An import duty rate minimum applicable to certain goods imported for importation.
Average Tariff Rate Applied to Goods and Trading Nations – An average tariff rate applied across both goods and trading nations.
Trump’s Tit-for-Tat Tariff Approach
Under President Trump’s “tit for tat” tariff approach, several countries, including India, were hit with tariffs of a 26% tariff rate. Trump noted that these were implemented so as to match other nations’ rates on American products while attributing only 50% of them to U.S. products themselves.