Tariff Trade War Update on India-USA
Tensions between India and the U.S. just worsened. On Wednesday, the doubled tariffs on imports from India took effect. The rate is now up to 50%.
The U.S. punished India for buying energy from Russia, funding the war. However, China and the European Union are also Russia’s customers. India complained that those countries do not face tariffs that high.
The U.S. is a significant importer of India’s goods. That would give the U.S. the upper hand in bargaining.
Sectors to Watch
Indian goods loaded on a vessel will have a three-week exemption from the tariffs. In addition, steel, aluminum, and derivative products are exempted. Copper and passenger vehicles are also exempt. Investors may want to watch stocks like Alcoa (AA), Cleveland-Cliffs (CLF), and Freeport-McMoRan (FCX). They are at risk of lower revenue growth if metal demand weakens in the quarter ahead.
Investors may bet on India (INDA) managing the higher tariffs by holding INDA stock. This ETF is up by around 11% from its 52-week low, closing at $52.68.
Other Tariff Developments
President Trump threatened to impose tariffs on furniture. That would raise costs for U.S. importers, who would pass the tariff to consumers. Watch stocks like Wayfair (W) and Williams-Sonoma (WSM).
Mexico (EWW) suspended postal shipments to the U.S. Firms are waiting for more clarity on rules related to the exemption on tariff duties for low-value packages.
