U.S. President Donald Trump. File
| Photo Credit: Reuters

U.S. President Donald Trump
| Photo Credit: Reuters

U.S. Supreme Court ruling striking down President Donald Trump’s sweeping global tariffs
| Photo Credit: Getty Images/iStockphoto

European Union leaders, on January 17, 2026, warned of a “dangerous downward spiral” ‌over U.S. President Donald Trump’s ​vow to implement increasing tariffs on European allies until the U.S. is allowed to buy Greenland. File
| Photo Credit: Reuters

U.S. President Donald Trump. File
| Photo Credit: Reuters

Representational image.
| Photo Credit: Getty Images

The rupee recovered 13 paise from its all-time low closing level to 86.98 against the US dollar in early trade on Tuesday (Feburary 4, 2025), after President Donald Trump agreed to pause tariffs on Mexico and Canada for 30 days.

Forex traders said the US dollar index, which had surged past 109.88 level, retreated to 108.74 after Trump announced the temporary pause on tariffs.

At the interbank foreign exchange, the rupee opened at 86.98 against the greenback, registering a rise of 13 paise from its previous close.

On Monday, the rupee plunged 49 paise to close at an all-time low of 87.11 against the US dollar.

“The Indian rupee opened near to 86.98 on Tuesday after relief from Mr. rump’s tariffs overnight on reaching an agreement with Canada and Mexico.

“The range for the day is expected between 86.80 to 87.20 with dips to be bought. Premiums rose on Monday after the Reserve Bank of India set the cut off for 6 months swap higher than market expectations,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Mr. Trump on Monday (February 3, 2025) held off on his tariff threats against Mexico and Canada for 30 days after they pledged to boost border enforcement.

Meanwhile, Finance Minister Nirmala Sitharaman on Monday (February 3, 2025) said the value of Indian rupee is market-determined, and there has been no devaluation, which is a feature of a fixed exchange rate regime.

The rupee has been falling in recent weeks, and on Monday (February 3, 2025) touched an all-time intraday low of 87.29 against the American currency.

Reacting to the development, Finance Secretary Tuhin Kanta Pandey said there is no concern over the rupee value and the Reserve Bank of India is managing the volatility of the local currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22 per cent lower at 108.74.

Brent crude, the global oil benchmark, fell 0.57 per cent to USD 75.54 per barrel in futures trade.

New Delhi:

Donald Trump on Tuesday denounced India, China, and Brazil as “tremendous tariff-maker(s)” and said his government would not allow the three to continue down this path, declaring, “… we’re not going to let that happen any longer because we’re going to put America first.”

Speaking to House Republicans at a Florida retreat, the United States President acknowledged the three countries – founding members of the increasingly influential BRICS bloc – were acting in their respective best interests, but seemed also to insist “… they mean us harm”.

“We’re going to put tariffs on outside countries and people that really mean harm to us. Well… they mean us harm, but they basically want to make their country good. China is a tremendous tariff-maker, and India, Brazil, and so many other countries. (But) we’re not going to let that happen any longer… because we’re going to put America first,” Trump declared to cheers.

The comments came shortly after it emerged Prime Minister Narendra Modi is likely to meet Trump in Washington, as early as next month. The two leaders spoke on the phone Monday night; it is unclear if tariffs were on the agenda, but New Delhi’s view on ‘illegal immigrants was.

READ | “Mutually Beneficial, Trusted Partnership”: Modi-Trump Phone Call

However, the US President’s view on India and tariffs is seen by many as problematic, given he slammed Delhi – the US’ largest trading partner – as a “very big abuser” during his campaign.

Trump also spoke of a “very fair system” to “very quickly” make the US “richer and more powerful”, repeating what he said after he was sworn in last week; he said, “Instead of taxing our citizens to enrich other countries… we will tariff and tax foreign countries to enrich our citizens.”

And if foreign companies – Indian, Chinese, Brazilian, or others – want to avoid these high tariffs, Trump said, they would have to “build your plant right here in America”.

He also told the House Republicans of plans to slap tariffs on steel, aluminium, copper, and other materials required by the American military. “We have to bring production back… There was a time we made a ship a day. Now we can’t… We don’t know what the hell we’re doing.”

READ | “America First”: Trump Vows Tariffs On Nations That “Mean Harm” To US

High tariffs on goods imported into the US – specifically from China – were a frequent refrain during Trump’s campaign. He also warned of “100 per cent tariffs” on BRICS nations to (in his mind) shut down talk of member-nations not using the dollar as the common currency.

Trump’s tariffs tirade has a clear economic agenda, questionable though the means may be, and that is to jumpstart manufacturing in the US. By marking up the prices of key commodities like steel, semi-conductors, medicines, etc., he is hoping to do just that. “Under the ‘America First’ economic model, as tariffs on other countries go up, taxes on American workers and businesses will come down and massive numbers of jobs and factories will come home.”

READ | How Donald Trump Is Using “Tariffs” As A Weapon

The other perspective is ‘tariff as a weapon’, a point-of-view underlined by Trump’s clash with Colombia over deportations. The South American country initially refused to accept a plane loaded with ‘illegal immigrants’, only then to face massive 25 per cent tariffs and a trade war.

Colombian President Gustavo Petro eventually relented; he had to, of course.

READ | “Cooperate Or…”: In Colombia Face-off, Trump’s Strong Message

White House Spokeswoman Karoline Leavitt was quick to claim a ‘victory’, saying: “Today’s events make clear to the world that America is respected again”, and Trump echoed that sentiment Monday, telling reporters “it serves the world well to look at” the Colombia spat.

With input from agencies

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Ottawa:

Canadian Prime Minister Justin Trudeau on Tuesday hit back at US President-elect Donald Trump’s threat to use “economic force” to absorb Canada into the United States, saying there is no possibility of merging countries.

“There isn’t a snowball’s chance in hell that Canada would become part of the United States,” Mr Trudeau wrote on X (formally Twitter).

“Workers and communities in both our countries benefit from being each other’s biggest trading and security partner,” he added.

There isn’t a snowball’s chance in hell that Canada would become part of the United States.

Workers and communities in both our countries benefit from being each other’s biggest trading and security partner.

— Justin Trudeau (@JustinTrudeau) January 7, 2025

Canadian foreign minister also added to Prime Minister Trudeau’s remark, saying the country will “never back down” from threats by Donald Trump.

Foreign Minister Melanie Joly accused Trump of showing with his remarks “a complete lack of understanding” of Canada.

“Our economy is strong. Our people our strong. We will never back down in the face of threats,” she said on the social media platform owned by Trump ally Elon Musk.

Canada’s response came after incoming US president Trump said he was willing to use “economic force” to merge Canada and the United States, hours after the Canadian premier announced his resignation as the leader of the Liberal Party and prime minister.

Speaking at a press conference at Florida Mar-a Lago home, he said, “You get rid of that artificially drawn line, and you take a look at what that looks like, and it would also be much better for national security.”

“Canada and the United States, that would really be something,” Mr Trump added.

He also raised concerns about Canada’s military spending and said, “They have a very small military. They rely on our military. It’s all fine, but, you know, they got to pay for that. It’s very unfair.”

Asked if he would use military force to bring Canada to heel, the incoming president said “no, economic force.”

Since his election victory in November, Mr Trump has repeatedly needled Canada about it becoming the “51st US state”.

Previously, he has threatened to slap up to 25 per cent tariff on Canadian goods unless the northern American country took substantial steps to increase security on the shared border and reduce drugs and illegal immigrants crossing into the US.

In response, the Trudeau government has promised to implement strict security measures along the US-Canada border but said it would consider imposing counter-tariffs if Mr Trump follows with his threats.

Canada and the US reportedly share a trillion-dollar trade relationship. According to the Canadian government’s data, nearly C$3.6bn ($2.5bn) worth of goods and services crossed the border daily in 2023.

Experts believe if Donald Trump follows through with his threat after taking office on January 20, it could hurt Canada’s economy significantly.

Donald Trump’s tariff threats have rattled foreign businesses and governments, with many fearing it could signal the opening salvo of an all-out trade war when he returns to the White House next year.

The president-elect on Monday placed both allies and rivals on notice, vowing to quickly slap an across-the-board tariff of 25 percent on Canada and Mexico, and add a 10 percent tariff on China.

Following through on that threat — or his campaign promise of a 10 percent levy on all US imports — will spark retaliation and have ripple effects across the global economy, analysts say.

“Our assumption is that all these other countries, all these other advanced economies, especially in Asia, they will retaliate in kind,” economist Bernard Yaros of Oxford Economics told AFP.

US tariffs and retaliation including from Europe and Asia would “depress growth” and trade flows, he said, estimating a cut to global growth of 0.1 to 0.9 percentage points in 2026.

Even before tariffs take effect, threats weigh on sentiment and could delay investments and hiring, ING economists Ruben Dewitte and Inga Fechner warned in a note.

Trump has long viewed tariffs as a negotiating tool — or an “all-purpose bludgeon” as a recent Wall Street Journal editorial put it.

On Monday, Trump said that the tariffs on Mexico and Canada would only be removed when illegal immigration and drug trafficking to the United States are stopped.

While seeking to build US leverage, he also risks longer term impacts, with some suggesting he would push countries toward China, Columbia Law School professor Petros Mavroidis said.

“What he definitely does is alienate all his allies,” he told AFP.

Erin Murphy, senior fellow at the Center for Strategic and International Studies, said in Trump’s threats “there is no differentiation” regarding countries’ economic development status or affinity with Washington.

Europe pushback

Europe could be particularly impacted, Dewitte and Fechner said, warning that “a looming new trade war could push the eurozone economy from sluggish growth into recession.”

EU tariffs on car imports were a particular target of Trump during his campaign.

But US reliance on the bloc for strategically important products, mainly in the chemical and pharmaceutical sectors, could give the EU some leverage in talks, ING said.

“European countries will be less likely to strike any kind of bargain with Trump than Canada or Mexico,” said Peterson Institute for International Economics nonresident senior fellow Gary Hufbauer.

He expects the EU could offer to reduce auto tariffs and buy more US agricultural products like soybeans, but it may not be enough for an administration seeking greater market access or rules exemptions.

Should the US impose tariffs, the EU will probably retaliate on iconic US goods like iPhones or whiskey, he said.

European countries could turn to the World Trade Organization (WTO), though even favorable rulings from the international body may not significantly change US practices.

EU chief Ursula von der Leyen has said she will work towards “constructive cooperation” with US authorities.

Jovita Neliupsiene, the EU ambassador to the United States, meanwhile said the bloc is ready to respond to new trade frictions.

Avoiding escalation

In Asia, economies like Japan and South Korea could be targeted over metals and auto exports, while Vietnam may also draw US scrutiny over solar panels, Yaros said.

The US trade deficit with Vietnam has widened in recent years on a surge in goods imports.

Yaros said that countries targeted by Trump’s tariffs, in seeking to avoid escalation, will “retaliate in a way that’s commensurate to the action done by the US, but no greater.”

China, based on precedent, might eschew equal retaliation for tools like export controls, he added.

Daniel Russel of the Asia Society Policy Institute said both Tokyo and Seoul are very focused on preparing for potential tariffs.

He expects partners like South Korea could seek exemptions from blanket US tariffs, for example, by citing its high-tech investments in America.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The bull statue at the Bombay Stock Exchange building, in Mumbai.
| Photo Credit: PTI

Benchmark indices Sensex and Nifty snapped the two-day rally and closed lower on Tuesday (November 26, 2024) in line with weak global market trends amid concerns over tariff threats by U.S. President-elect Donald Trump.

In a volatile trade, the 30-share Sensex declined 105.79 points or 0.13% to settle at 80,004.06. During the day, it lost 311.18 points or 0.38% to 79,798.67.

The broader NSE Nifty declined by 27.40 points or 0.11% to 24,194.50.

From the 30-share Sensex pack, UltraTech Cement, Adani Ports, Sun Pharma, NTPC, Tata Motors, Mahindra & Mahindra, Larsen & Toubro and Power Grid were among the biggest laggards.

Asian Paints, Infosys, JSW Steel, Tata Consultancy Services and Reliance Industries were among the biggest gainers.

Global stock markets declined following concerns over U.S. President-elect Donald Trump’s comment that he plans to impose new tariffs on Mexico, Canada and China as soon as he takes office on January 20.

In Asian markets, Seoul, Tokyo and Shanghai settled lower while Hong Kong ended higher. European markets were trading lower. The U.S. markets ended in positive territory on Monday (November 25, 2024).

All Adani group stocks ended lower, with Adani Green Energy tumbling 7.05%.

Global oil benchmark Brent crude climbed 0.71% to $73.58 a barrel.

Benchmark equity indices surged on Monday, helped by the BJP pulling off a stunning performance in Maharashtra, winning a record number of seats to propel the party-led ruling Mahayuti alliance to a landslide victory.

The BSE benchmark jumped 992.74 points or 1.25% to settle at 80,109.85 on Monday. The Nifty surged 314.65 points or 1.32% to 24,221.90.

Foreign Institutional Investors (FIIs) turned buyers on Monday after unabated selling for the past many days. They bought equities worth ₹9,947.55 crore, according to exchange data.