Donald Trump’s decision to impose high tariffs on Canada, Mexico and China has shaken the global trade market. There is a debate on whether these tariffs, which have been increased to 25% and 10%, will be beneficial or harmful for America. The Trump administration says that illegal fentanyl drugs are reaching America from these countries, due to which lakhs of people have died. But can this problem be solved by imposing trade tariffs?

Impact of tariff: threat to trade or new opportunities?

America has a Free Trade Agreement (NAFTA) with Canada and Mexico, in which import-export took place without tariff. But Trump’s new decision seems to be weakening this agreement.

Canada imposed a 25% tariff on 106 billion dollars worth of American imports.

Mexico also announced tariffs in response.

China is going to file a complaint in the WTO.

The biggest impact of this tariff war will be on automobile, agriculture, technology and manufacturing sectors. The increase in the cost of these products will also affect the pockets of ordinary consumers.

Opportunity or danger for India?

This time Trump did not impose a direct tariff on India, but earlier he had threatened to impose high tariffs on India, China and Brazil. India is safe from this impact so far, but due to the instability of global trade, we will also have to be prepared.

One positive angle is that imposing tariffs on China can provide new opportunities for Indian products in the US market. This can be a golden opportunity for exporters and manufacturers if India manages its supply chain and trade policies smartly.

What could be the solution?

Trade war does not bring long-term benefits to any country. Instead of tariff barriers, collaboration and fair trade policies will benefit all countries. The structure of the global economy is interconnected and decisions of one country directly impact other economies.

The effects of Trump’s new trade policies will slowly be visible, but one thing is clear—tariffs only increase tensions, they do not provide solutions.