White House may soften Trump's tariff plan, these sectors might be spared; how will it impact India?

The Donald Trump administration’s plan to impose reciprocal tariffs on April 2 is narrower than initially expected, with industries like automobiles, pharmaceuticals, and semiconductors unlikely to face immediate levies, The Wall Street Journal reported, citing a senior administration official.

While the White House had previously considered sector-specific tariffs, the final rollout is expected to focus on individual trade partners, signaling a more calculated approach aimed at reducing trade imbalances without broadly disrupting key industries.

Notably, EV automaker Tesla has been at the receiving end over a combination of factors such as its CEO Elon Musk's political controversies, public protests against the brand, declining sales figures, and increased competition. Tesla’s stock has been in decline, with analysts downgrading delivery forecasts, citing economic uncertainty and potential tariff fallout.
The impending trade tariffs are expected to cause further strain on Tesla. 

The reciprocal tariffs are designed to match US import duties with those of its trading partners, a move President Donald Trump has framed as a corrective measure against unfair trade practices. He has dubbed April 2 “Liberation Day”, marking a major shift in US trade policy.

Treasury Secretary Scott Bessent has identified 15 nations, referred to as the “dirty 15”, that will face customized tariff hikes. These include major G-20 economies such as Australia, Brazil, Canada, China, the European Union, India, Japan, South Korea, Mexico, Russia, and Vietnam.

If automobiles, pharmaceuticals, and semiconductors are exempted from Trump's tariffs, India benefits from stable exports in these key sectors, preventing price hikes and supply chain disruptions for Indian firms. 

Instead of imposing flat-rate tariffs across industries, the administration has opted for country-specific levies, allowing for more strategic targeting.

Despite the broad scope of the tariffs, uncertainty remains regarding their application to Canada and Mexico, which have been linked to fentanyl trafficking concerns.

Meanwhile, corporate executives, particularly in the automotive sector, have voiced concerns about potential supply chain disruptions and the lack of clear exemption criteria. However, President Trump has shown little interest in granting exemptions, stating, "If you grant one, you have to grant them for all."

Commerce Secretary Howard Lutnick and US Trade Representative Jameson Greer have reinforced this stance, citing past difficulties with trade carve-outs. Still, Trump has suggested some “flexibility”, indicating that exceptions could be made on a limited basis.

With the April 2 rollout imminent, businesses are rushing to assess the potential impact of the tariffs.