Pushing the farfetched notion of replacing income-tax revenues with tariffs (custom duties), Donald Trump, during his 2024 Presidential campaign, advocated a massive increase in tariffs ~ 60 per cent tariff on China, 100 per cent on Mexico, and 20 per cent on all other countries. Right from his inauguration in January 2025, Trump has made tariffs the centrepiece of his Presidency ~ talking incessantly about tariffs in his interaction with world leaders, and inventing the verb ‘tariffed’ (equivalent to gassed) in the process.

If Trump is to be believed, high tariffs on goods being imported into the US would bolster US revenues, increase manufacturing activity, and also devastate economies of the countries being ‘tariffed.’ Following this strategy, on 2 April 2025, a day Trump called “Liberation Day,” Trump declared a national emergency and announced “reciprocal tariffs” on all countries that were not subject to other sanctions. A minimum tariff of 10 per cent on almost all US imports was imposed with effect from 5 April ~ raising the US tariff rate to 27 per cent ~ its highest level in over a century.

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The US stock market crashed, which prompted Trump to halt the new tariffs for 90 days ~ except US tariffs on Chinese goods, which rose to 145 per cent. Following a zig-zag course, tariffs on Chinese goods were reduced to 30 per cent ~ giving the American public a new acronym, TACO i.e., Trump Always Chickens Out. Continuing in the same vein, on 30 July, Trump imposed an additional 40 per cent tariff, on top of a 10 per cent “reciprocal” tariff on Brazil, and on 31 July, Trump announced an extra 25 per cent tariff on India, making for a total tariff of 50 per cent.

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September saw Trump impose 100 percent tariffs on pharmaceuticals, which is one of India’s primary exports to the US. Come October and Trump has threatened China with 155 per cent tariffs, and India with unspecified ‘massive tariffs,’ should it continue to buy Russian oil. The large fiscal switch, with Congress enacting humongous income-tax cuts, and the simultaneous imposition of increased tariffs on........

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