India, if we impose reciprocity tariffs, other Asian Pacific countries in India will see a decline in growth rate of 0.2-0.4 percentage points: S&P

S&P Global Ratings said Tuesday that if the U.S. announced reciprocal tariffs announced on April 2, major Asia-Pacific economies such as India, China and Japan will grow by 0.2-0.4 percentage points (PPT) over the next two years. It said the U.S. threat and imposition of tariffs will slow global trade and confidence. The region’s reliance on China’s exports will take a huge blow to manufacturers and small economies.

“If the tariffs announced on April 2, 2025 are the resumes of the former China economy, then the geopolitical and economic impact will be in-depth,” said S&P Global Ratings, head of research at Asia Pacific.

For India, S&P expects growth in 2025 and 2026 to be 6.5% and 6.8% respectively in March. If reciprocity tariffs announced by U.S. President Donald Trump are implemented, S&P estimates growth will drop to 6.3% and 6.5% respectively.
Trump postponed the imposition of reciprocity tariffs on April 9 for three months after announcing that it had shaken the global stock market on April 2, with the exception of China, where they have already sold 125% of the tariffs.

However, the 10% additional liability for exports to us announced on April 2 remains ongoing.

If the tariffs announced on April 2 are fully implemented, “mainland China, Japan and India’s major (Asia-Pacific) economies will all decline by 0.2-0.4 PPT over the next two years. Vietnam, Thailand and Taiwan will have the biggest direct blow to growth.” S&P said the credit situation in the Asia-Pacific region will remain firmly disadvantaged as the trade battle between China and the United States marks a significant escalation in relations between the two countries and growth and confidence in the Asia-Pacific region. S&P said business confidence will deteriorate further in the case of new investments and family sentiment deteriorated. In addition, equity and debt markets may remain volatile.

The trade quarrel between China and the United States marks a significant escalation of ties between the two countries.

“Since January 20, the U.S. government has imposed a 145% tariff on imports from China, with an effective tariff rate of about 15% before President Trump returns to office.

“This level will reduce China’s export competitiveness in the United States and cause huge losses to China’s economy,” Standard & Poor said.

In response to the latest U.S. tariff rate hike, China raised U.S. imports to 125%, and maintained export restrictions on rare earth minerals. However, Chinese authorities said they will no longer match the Trump administration, as U.S. goods are no longer viable for Chinese importers at these tariff levels.

“A sharper deterioration in China’s relations will further intensify confidence and severely undermine supply chains and global trade flows. These events together drive a growing global slowdown,” S&P said.