Trump’s New Tariffs On Indian Goods To Hit US GDP And Fuel Inflation: SBI Report

Trump Tariffs

Washington/New Delhi, Aug 27 – Indian exporters are bracing for impact after the United States (Trump) imposed an additional 25% tariff on key Indian goods starting Wednesday. According to SBI Research, the move is expected to shave off 40–50 basis points from US GDP while fueling fresh inflationary pressures.

The report noted that tariffs, combined with a weaker dollar, are already feeding into higher prices in import-sensitive sectors such as electronics, automobiles, and consumer durables. US inflation is now projected to remain above the Federal Reserve’s 2% target until 2026.

SBI Research on Inflation and Growth

“The US is beginning to show renewed inflationary pressure, driven by the pass-through effects of recent tariffs and a weaker dollar,” SBI said. The report highlighted that higher input costs will weigh on economic growth in the months ahead.

At the Jackson Hole symposium, Federal Reserve Chair Jerome Powell admitted the effects of tariffs are “clearly visible” in US prices. He stressed that the Fed faces a delicate balancing act between tackling inflation and protecting a fragile job market.

Prices Already Rising in the US

Wholesale prices rose nearly 1% in July, the sharpest jump in over three years.
The Producer Price Index surged 3.3% year-on-year, with steep increases in tariff-heavy categories like furniture, apparel, and processed goods.
Economists warn American families will face higher household costs unless tariffs are rolled back.

Background of Trump’s Tariff Move

The Department of Homeland Security (DHS) said the new tariffs were imposed in response to “threats to the United States by the Government of the Russian Federation.” This 25% hike comes on top of earlier tariffs, though exemptions have been allowed for items such as electronics and pharmaceuticals.

Highlights:

Trump imposes additional 25% tariffs on Indian goods, sparking inflation fears.
SBI Research warns US GDP could shrink by 40–50 bps due to tariffs.
Fed Chair Jerome Powell admits inflationary effects of tariffs are visible in the economy.

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