Latest news with #reciprocal tariff
Entrepreneur
2 days ago
- Automotive
- Entrepreneur
India To lose 20% Of Auto Component Export To US; Should Focus On High Value Parts & New Markets: Experts
Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. The recent imposition of higher US tariffs presents a significant challenge for Indian auto component manufacturers. Almost 15-20 percent of India's U.S.-bound auto‑component exports could be lost in the short term. While a 25 percent duty was already in effect for the sector from May 3, 2025 , the additional reciprocal 25 percent tariff effective August 2025, will take the total to 50 per cent from August 27. "In India's auto‑component exports to the U.S., roughly 30-40 percent comes from programs in which India is one of multiple approved suppliers with a defined share of business (SOB). In these cases, U.S. buyers already have qualified suppliers in other countries—such as Mexico or China—making the same part number to identical specifications. That means they can quickly reallocate orders outside India, often within weeks, without fresh tooling or lengthy PPAP approvals," said Ravindra Patki, managing partner, Vector Consulting Group. The remaining 60-70 percent of exports are tied to India‑exclusive tooling or safety‑critical parts that require months to resource. "This SOB‑driven segment—worth about $2.1–2.8 billion of India's $7 billion in U.S.-bound auto‑component exports—is at the highest immediate risk from new tariffs. However, even in SOB programs, actual shifts depend on alternate suppliers' spare capacity, logistics cost, and the duration of the tariff—so, in practice, perhaps only half of this at‑risk volume would move quickly. Almost 15-20 percent of India's U.S.-bound auto‑component exports could be lost in the short term, while the rest faces a slower, more complex transition," he added. Even the initial 25 percent duty imposed on the automotive sector by the US fundamentally alters the competitive landscape for US exports in the short term. In order to quickly adjust India's plans to protect the strong export growth, especially since the US was one of the biggest markets for auto parts in FY2025, India needs to startegise. "To lessen this impact, Indian manufacturers should actively look into setting up some production closer to the US. Countries like Mexico and Canada, thanks to the USMCA trade agreement, allow our parts to enter the US without extra taxes if they meet certain local content rules," said Saurabh Agarwal, partner & automotive tax leader, EY India. The Automotive Component Manufacturers Association of India (ACMA) said the United States government's decision to impose higher and additional tariffs on select Indian imports—including auto components—presents near-term headwinds for the industry but also reinforces the need to build competitiveness and diversify export markets. By focusing on new markets and making specialized, high-value parts that aren't tied to traditional engines, India can turn this challenge into a chance to become even more competitive globally and achieve lasting growth. "It's crucial to aggressively expand into other markets. The new trade agreement with the UK, signed recently, gives India immediate tax-free access for most auto parts, which is a big advantage. We also need to push hard for a quick trade deal with the European Union, using the success of the UK agreement to help us. Beyond that, the growing demand in developing countries in Asia, Africa, and Latin America offers huge potential for long-term growth," Agarwal from EY added. Sharing a similar sentiment, Shradha Suri Marwah, president, ACMA, said, "The recent decision by the United States to impose higher and additional tariffs on certain imports from India underscores the shifting landscape of global trade. While this development presents near-term headwinds for Indian exporters, it also underscores the importance of enhancing our sector's competitiveness, strengthening value addition, and exploring new and diversified markets." The United States remains a key trading partner for Indian auto component manufacturers. In FY25, it accounted for 27 per cent of India's total auto component exports, which stood at $22.9 billion, and 7 per cent of imports, worth $22.4 billion. "The latest tariff changes are expected to have a mixed impact on the auto sector. While they may offer protection to domestic manufacturers in certain segments, they could also lead to higher input costs in others, especially where imports form a key part of the supply chain. For the mobility services industry, including car rentals and leasing, we will continue to assess these changes closely to ensure cost-efficiency for customers while aligning with evolving regulatory frameworks," said Aman Naagar, MD, AVIS India. Union roads transport minister Nitin Gadkari believes US President Donald Trump's tariff threats won't hurt India much as the domestic automobile industry is strong enough to cater to the world market and not dependent on just "one or two nations".
Yahoo
23-07-2025
- Business
- Yahoo
Trump announces trade deal with Japan
US President Donald Trump has announced a trade deal with Japan he says will result in Japan investing $US550 billion ($A842 billion) into the United States and pay a 15 per cent reciprocal tariff. In a post on Truth Social, Trump added that Japan will open to trade for cars, trucks, rice and certain agricultural products, among other items. "This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan," he said. Trump's announcement follows a meeting with Japan's top tariff negotiator, Ryosei Akazawa, at the White House on Tuesday, according the Asahi newspaper. The newspaper also reported that Akazawa held meetings with US Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent.
CNA
23-07-2025
- Business
- CNA
Trump announces trade deal with Japan, including 15% tariff
WASHINGTON: US President Donald Trump on Tuesday (Jul 22) announced a trade deal with Japan that he said will result in Japan investing US$550 billion into the United States and paying a 15 per cent reciprocal tariff. In a post on Truth Social, Trump added that Japan will open to trade, including cars, trucks, rice and certain agricultural products. "We just completed a massive deal with Japan, perhaps the largest deal ever made," he said. Japan's top tariff negotiator, Ryosei Akazawa, met with Trump at the White House on Tuesday, the Asahi newspaper reported. Earlier on Tuesday, Akazawa held more than two hours of talks with US Commerce Secretary Howard Lutnick. They engaged in "frank talks to seek an agreement benefiting both countries", according to the Japanese government. The Asahi reported that Akazawa also held a separate meeting with US Treasury Secretary Scott Bessent. Japanese Prime Minister Shigeru Ishiba aims to visit the US this month to meet with Trump if there is progress in the trade negotiations, Yomiuri newspaper reported on Wednesday.
