New Delhi: In a sweeping move to reshape global trade dynamics, US President Donald Trump has signed an executive order granting tariff exemptions to select trading partners, effective from Monday.
The order, aimed at bolstering America’s industrial interests while reducing trade deficits, offers zero import duties on over 45 categories of goods, including critical items like nickel, gold, pharmaceutical compounds, and chemicals. However, India, a key player in global trade, appears to be absent from the list of beneficiaries, raising questions about its trade negotiations with Washington.
Scope Of The Exemptions
The executive order targets goods that cannot be sufficiently produced, mined, or grown in the United States, such as natural graphite, various forms of nickel essential for stainless steel and electric vehicle batteries, and pharmaceutical compounds like lidocaine used in anaesthetics and diagnostic reagents. Gold imports, ranging from powders to bullion, also feature prominently, a significant relief for countries like Switzerland, which faces a steep 39% tariff due to the lack of a trade deal with the US. Agricultural products, aircraft parts, and non-patented pharmaceutical items have also secured exemptions, aligning with America’s commitments to allies like Japan and the European Union under existing framework agreements.
Strategic Flexibility
Trump’s latest policy, enacted under the Section 232 national security statute and his “reciprocal tariffs” initiative, allows the US Trade Representative, Commerce Department, and customs officials to waive duties on covered imports without requiring a new executive order, provided a country has clinched a reciprocal trade deal. This flexibility is designed to encourage deeper trade alignments with “aligned partners” who commit to reducing Trump’s reciprocal tariffs. The White House emphasised that the exemptions aim to secure supply chains for goods critical to US industries while pressuring trading partners to open their markets further.
Revoked Exemption And Global Impact
Notably, the order also revokes previous exemptions for certain plastics and polysilicon, a key component in solar panels, signaling a strategic pivot to protect domestic production in specific sectors. The move comes as part of Trump’s broader trade agenda, which has seen tariffs skyrocket in his first seven months of office, with the average US tariff rate climbing from 2.5% to 18.6% by August 2025, according to recent estimates. This aggressive stance, justified under the International Emergency Economic Powers Act, has sparked global trade tensions, with countries like Switzerland struggling under high tariffs.
India’s Position And Public Sentiment
While the exemptions offer a lifeline to allied nations, India’s exclusion from the list underscores the challenges it faces in navigating Trump’s trade policies. Posts on X reflect mixed sentiments, with some users praising Trump’s strategy to incentivise fair trade, while others warn of disruptions in global supply chains. As the US pushes for reciprocal trade agreements, the world watches closely to see how nations, including India, respond to this high-stakes economic gambit.
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