The ‘Tariff war’ has seemingly intensified since US President-elect Donald Trump announced that immediately after assuming charge, he would implement his campaign promise of raising tariffs. China, Mexico and Canada are the countries on his radar.
Now he has ‘threatened’ the EU with tariffs if the bloc does not reduce its “tremendous” trade gap with the US with regard to oil and gas purchases.
In the latest move, Mexico has announced an imposition of a 35 per cent increase in tariffs on finished products and a 15 per cent increase on textile inputs. It has been announced that the increases will remain in place until 22nd April 2026.
As per the information available, currently, various Indian textile products have tariffs of 10-20 per cent.
China is the main textile exporting country to Mexico exporting products worth US $ 4.6 billion in 2023. India’s textile export to Mexico was more than US $ 325 million in 2023-24 which majorly involved woven and knitted garments.
| Products, HS Code | Export in 22-23 | Export in 23-24 |
| Knitted garments (61) | 76.27 | 73.18 |
| Woven garments (62) | 97.13 | 101.67 |
| Cotton (52) | 43.35 | 48.79 |
| Other Made up (63) | 35.05 | 47.62 |
| Man-made staple fibres (55) | 44.31 | 49.23 |
Source: Govt. of India Figures in US $ Million
Donald Trump has also criticised India’s tariff charges, highlighting a 100 per cent tariff for some specific American products. It has been reported by the media that Indian officials are working on a detailed sector-wise analysis, drawing up multiple scenarios to prepare for a possible increase in tariffs on product exports to the US.
In the past, the overall impact on India was ‘positive’ since an analysis by the Global Trade Research Initiative (GTRI) says that the last Trump tariff war helped India.
Just a few months ago, Indonesia also extended textile import tariffs amid an industry slump.
