'US GDP may drop by $108 bn annually': CA says Trump's tariffs on India will backfire on American consumers

US President Donald Trump recently announced an additional 25 per cent tariffs on Indian imports, citing New Delhi's continued purchase of Russian oil. CA Nitin Kaushik said in his social media post that instead of impacting India, Trump's move is going to backfire on American consumers. 

In a post on X (formerly Twitter), Kaushik explained that Trump's tariff threat is not a power play, but it is a panic move.

"Modi won't pick up the phone. And there's a reason for it. Trump's 50% tariff threat isn't a power play. It's a panic move. Because this time, America will bleed more than Bharat," he wrote.

He explained that the tariffs against India are part of Trump's grand plan to tax the world to address the US debt, when, in fact, such a move could prove to be a GDP killer. Kaushik claimed in his post that due to Trump's tariff tantrum, the US GDP may shrink by $108 billion annually. 

"Real Cost of Trump’s Tariff Game — Economists predict: US GDP may shrink by $108 billion annually. Each US household could lose ~$861/year. Consumer prices will surge. US exports may drop by $451 billion. So who’s really paying the price? Americans," the post read. 

Besides this, Kaushik said that the impact of Trump's tariffs would not be limited to the US alone. "Tariffs don't just stay home. Supply chains go haywire. Input costs shoot up. Global firms rethink US exposure. While EU, China, and others may also feel the pinch, the US is expected to suffer the worst." 

As per the post, Switzerland and Brazil are expected to face steep duties, whereas Australia and the UK will be relatively spared. Speaking of India, Kaushik added that Prime Minister Narendra Modi is very well aware that India is better insulated to deal with Trump's tariff threats. 

"And What About India? India is better insulated: Domestic consumption > export dependence. Trade with the US = just 1.85% of India’s GDP. Multiple FTAs + diversified markets. Rising self-reliance in defence, electronics, energy. Modi knows this. No panic button needed." 

As per CA Kaushik, the bigger game is to pacify Trump's ego after he failed to broker peace in Ukraine and India refused any third-party mediation in its conflict with Pakistan.

Trump also seems to be frustrated because India has refused to budge on the issue of US' entry in its agriculture, dairy and crypto markets and also on the issue of de-dollarisation. Towards the end of his post, Kaushik wrote: "Trump's tariffs? Just a distraction from inflation, no Fed cuts, and failed diplomacy."