NEW DELHI: Former RBI governor Raghuram Rajan on Thursday described the reciprocal tariffs on about 60 countries by the Trump administration a “self goal” and said its impact on India will be “smaller”.
US President Donald Trump has announced the imposition of additional ad-valorem duties ranging from 10% to 50% on imports from all trading partners.
“Let us recognise that in the short run, this will adversely affect the US economy first and foremost – it is a self-goal as footballers would say. Coming to the effects on other countries, the direct effect of any tariff on India’s exports will be to raise prices for US consumers, reducing their demand, and hence Indian growth,” he said.
“Of course, to the extent that the US has applied tariffs on other countries also, and India is competing with producers from those countries, the overall effect will be smaller than if the tariffs had been applied only on India – since US consumers will not be able to substitute away to non-tariffed producers,” he noted.agencies