Tariff Chaos: China, EU Retaliate to US Duties; RBI Slashes Repo Rates, Indian Pharma Stocks Tumble
New Delhi: As US President Donald Trump's reciprocal tariffs – including a massive 104% imposition on China – kicked off today (April 9), Beijing and the EU announced their own retaliatory levies, while major stock indexes sunk in Asia.
China announced it will hike its tariffs on US goods from 34% to 84% and filed a complaint in the World Trade Organisation (WTO). The EU also decided to charge its own tariffs against the US that will range between 15% and 25%.
Earlier in the day, the Reserve Bank of India’s Monetary Policy Committee cut repo rates by 25 basis points to 6% in its first meeting of the 2025-26 financial year. Some kinds of loans are likely to get cheaper as a result, including home and personal loans.
RBI governor Sanjay Malhotra said that the MPC would change its stance to 'accommodative' from 'neutral'.
Malhotra said that the real GDP 2025-26 forecast is at 6.5%. The CPI inflation for the same financial year is projected at 4%.
Both indices of India's stock markets, which remain focused on the RBI's MPC announcement, declined in opening, reversing gains made a day ago.
PTI reported that the 30-share BSE benchmark Sensex dropped 554.02 points to 73,673.06 in early trade. The NSE Nifty declined 178.85 points to 22,357.
As investors grow nervous, there are speculations of a wider trade war and a global recession.
“China also wants to make a deal, badly, but they don’t know how to get it started,” Trump wrote on social media. “We are waiting for their call. It will happen!”
Oil prices dropped to their lowest in more than four years today.
China, EU announce retaliatory moves
China's finance ministry said this afternoon that it would raise its retaliatory tariff on US imports from 34% up to 84%. The higher tariff is set to take effect on Thursday.
US treasury secretary Scott Bessent said shortly afterward that China's new tariffs were “unfortunate”.
Beijing also lodged a new complaint with the WTO.
“The situation has dangerously escalated … As one of the affected members, China expresses grave concern and firm opposition to this reckless move,” the Chinese mission to the WTO said in a statement provided to Reuters. The move was also reported by the Chinese press.
Meanwhile, the EU agreed on Wednesday to go ahead with its own tariffs on US imports in retaliation for Trump's previously announced levies on European steel and aluminium.
The EU tariffs will range from 15% to 25%, targeting US goods and commodities like soybeans, fruit, motorcycles, beauty products, clothes and dental floss. They will come into action next Tuesday.
“These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome,” the European Commission said in a statement.
Pharma worries
Reuters has it that Indian pharmaceutical stocks have already fallen 1.7% after Trump's indication of a "major tariff" on pharma imports. “I know what the hell I’m doing,” Trump said, before announcing the tariffs.
According to a fact sheet released by the White House following Trump’s speech on April 2, pharmaceutical companies worldwide had been exempted from reciprocal taxes. This had led Indian pharma to heave a sigh of relief.
Currently, the US ranks at the top of the list of the countries to which Indian pharma companies export their products.
Is India making changes?
Livemint has reported that India is considering tweaking some import quality rules that the US has flagged as major non-tariff barriers.
"The potential policy shift could involve a review of India’s Quality Control Orders (QCOs)—a suite of regulations that require both domestic and foreign manufacturers to meet standards set by the Bureau of Indian Standards (BIS). These rules have become a flashpoint in trade talks, with the US arguing they unfairly restrict market access for American companies," the report says.
Finmin banks on growth
PTI also reported from London that Union finance minister Nirmala Sitharaman said a day ago that the resilience of the economy and the strength of domestic demand will continue to make India an engine of growth amid the tariff landscape.
In an interaction at the High Commission of India in London, Sitharaman said India can tackle what is to come. “The world has seen depressed growth for over several years; earlier, it was low interest for long and now it’s going to be low growth for long, and that’s not happy news for anybody,” said Sitharaman.
Big Apple
The Wall Street Journal, meanwhile, has reported that Apple plans to send more iPhones to the US from India to offset the high cost of China tariffs, quoting insiders.
The adjustments are a short-term stopgap while Apple attempts to win an exemption.
Apple banks heavily on China for its iPhone components. India has been attempting to come across as an alternative manufacturing hub and is primarily an assembly site.
With inputs from DW.
This article was updated with news of China and the EU's retaliatory moves at 9:04 pm.
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