‘Nearly $30 trillion or $300,000 per family of four’: Economist says Trump’s tariffs will cost many people a lot

Economist, former Secretary of the Treasury and former Chief Economist of the World Bank, Lawrence H Summers, reacting to US President Donald Trump’s tariffs, said that never has an hour of presidential rhetoric cost so many people so much. 

“Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet. The best estimate of the loss from tariff policy is now closer to $30 trillion or $300,000 per family of four.

Trump, on April 2 that he labeled ‘Liberation Day’, imposed a minimum of 10 per cent tariffs on other countries. He announced 27 per cent tariffs on India, while also imposing 34 per cent on China, 20 per cent on European Union, 24 per cent on Japan, 25 per cent on South Korea, 31 per cent on Switzerland, 10 per cent on UK, 32 per cent on Taiwan, 24 per cent on Malaysia, 10 per cent on Brazil, 32 per cent on Indonesia, 46 per cent on Vietnam, 10 per cent on Singapore etc.

He also imposed sector-specific tariffs, for example, Indian autos will face a 25 per cent tariffs, which has been imposed on all sectors globally. Sectors such as pharma, semiconductors, copper, lumber, gold, energy and minerals will all be spared reciprocal tariffs. 

Mexico and Canada will also not face additional tariffs, as 25 per cent was already imposed previously.

WHAT EXPERTS ARE SAYING ON INDIA

“Trump seems to have used the respective trade deficit of each country with the US as the basis for reciprocal tariff calculations, rather than the actual level of tariffs imposed by each country,” said Emkay, commenting on the tariffs, further adding that since India-US have been negotiating a trade treaty could be in the works.

According to a Bernstein report, even though 27 per cent tariffs seem rather high, two of India high-ticket exports – IT services and pharmaceuticals – have been left untouched. 

“We believe India will be able to safely navigate through the tariff challenges and is more likely to engage with the US through negotiations rather than heating up the trade war. The immediate negative sentiment should be visible in the markets, but we still retain our second half macro recovery thesis, and view a potential trade agreement with the US as a positive long term development,” the report stated.