US President Donald Trump has announced a 25 percent recipe (mutual) tariff on all foreign -made automobiles (cars, bikes). It is being told that the import of vehicles and auto parts worth more than $ 460 billion will be covered with 25% auto tariffs of Trump. But the Automotive Component Manufacturers Association of India (ACMA) has clarified that this new tariff does not affect auto and auto parts exported from India, while removing the concern of Trump’s tariff Terror’s ‘dual kill’. However, the detailed list is still awaited.
The statement issued by ACMA stated that, “Trump’s move is an attempt to promote domestic manufacturing and to overcome business imbalance.”
It is worth noting that auto and auto parts and steel and aluminum items, already under section 232, are under tariffs, which was announced by President Trump in his order on 26 March 2025, he is not included in this order. However, a detailed list of auto components coming under 25% import duty in the US is awaited. “
Shraddha Suri Marwah, Chairman of ACMA and CMD of Subros Limited, said, “We hope that the bilateral talks between India and the US governments will benefit the two economies to benefit both economies. The association believes that strong trade relations between India and the US will help reduce its impact in the auto component sector.”
Attempt to reduce trade deficit …
Experts believe that this step taken with Donald Trump’s tariff is part of the attempt to balance the trade and reduce the US trade deficit with the rest of the world. America’s trade deficit with the rest of the world increased from $ 1.06 trillion to $ 1.2 trillion, causing more dollars outside the country. In January this year, America’s trade deficit was $ 156.8 billion.
However, India is a very small contributor in America’s trade deficit as compared to other countries. In 2023, the US goods trade deficit with India was $ 43.7 billion, with imports from India $ 87.4 billion and export to India was $ 43.7 billion. In 2024, the deficit increased to $ 45.7 billion, including imports of $ 91.4 billion and export of $ 45.7 billion. Given that America’s trade deficit with India is about 50%, Trump has imposed about half or 26% tariffs of that figure on Wednesday.
What is a trade deficit?
Trade deficit literally means trade deficit. This means that the import of a country is more than its export, that is, he sells more goods and services from other countries. It is also called negative balance of trade. For example, if a country sells $ 100 goods and buys $ 150 goods, it will have a 50 dollar trade deficit. Conversely, when the export of a country is higher than its imports, it is called Trade Surplus.
Impact on component makers …
Many Indian auto parts export to America. In such a situation, this new tariff can affect them. If we look at the figures, in the financial year 2024, auto parts worth $ 6.79 billion were exported to the US from India. Whereas Components worth $ 1.4 billion were imported on 15% duty from America. Samarvardhana is a major auto parts manufacturer in the country, which exports to the US on a large scale. Apart from this, auto components manufacturers include gold comstar and Bharat Forge.