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Trump’s 50% Tariffs on Indian Imports Trigger Wild Market Swings

Stocks rebounded after carve-outs for pharmaceuticals and semiconductors fueled optimism ahead of U.S.-India talks, Fed rate decisions.

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U.S. dollar, Euro and Pound banknotes are seen in this illustration taken May 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
A man looks at an electronic board displaying the Nikkei stock average outside a brokerage in Tokyo, Japan, August 6, 2024. REUTERS/Willy Kurniawan/File Photo

Overview

  • President Trump’s executive order lifting duties on drugs and chips left total tariffs at 50%, effective August 7, hitting export-oriented sectors with steep new levies.
  • Indian benchmarks opened sharply lower—Nifty futures down about 0.3%—before rebounding to close higher, with the Sensex swinging nearly 925 points intraday.
  • Pharmaceuticals and semiconductors were exempted under U.S. trade law, while textiles, automobiles and leather exporters face the full 50% duty.
  • Asian equities climbed on tech-led Wall Street gains and growing expectations of Federal Reserve rate cuts, shrugging off the tariff shock.
  • Investors are now focused on potential U.S.-India diplomatic talks and forthcoming Fed policy signals to determine how markets will fare next.