Trump's tariffs versus Modi's GST: Government reforms offer economic protection and benefits to Indian citizens.
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In a world grappling with economic uncertainties, two contrasting approaches to economic reform have emerged, one spearheaded by former U.S. President Donald Trump and the other by Indian Prime Minister Narendra Modi. Trump's strategy heavily relied on tariffs, while Modi has focused on Goods and Services Tax (GST) relief to stimulate the Indian economy.

Trump's Tariff Measures

During his time in office, Donald Trump implemented a series of tariffs on imported goods, arguing they were necessary to protect American industries and jobs. These tariffs, often imposed under the premise of national security or to address trade imbalances, affected a wide range of countries and products. However, the impact of these tariffs has been a subject of intense debate.

Economic Consequences:

  • Increased Costs for Businesses: American businesses, particularly those relying on imported components or materials, faced higher costs due to the tariffs. Many of these businesses import goods for the purpose of reselling to other small businesses, meaning these costs will be passed on to a broader range of businesses even before they hit consumers in the form of higher prices.
  • Consumer Burden: Some of the increased costs were passed on to consumers in the form of higher prices for goods and services. The Trump administration's tariffs are on track to cost the typical household an average of $2,400 per year, according to the Yale Budget Lab.
  • Trade Retaliation: Trump's tariffs led to retaliatory measures from other countries, impacting American exports and potentially harming industries reliant on foreign markets. As of April 4, 2025, China, Canada, and the European Union have announced or imposed retaliatory tariffs altogether affecting $330 billion of US exports.
  • GDP Reduction: The Tax Foundation estimated that the combined effect of U.S.-imposed tariffs and retaliatory tariffs could reduce U.S. GDP by 1.0 percent. Penn Wharton Budget Model projects Trump's tariffs will reduce long-run GDP by about 6% and wages by 5%.

Modi's GST Relief

In contrast to Trump's protectionist measures, Narendra Modi's government has focused on easing the burden of the Goods and Services Tax (GST) in India. The GST, implemented in 2017, is a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services throughout India. In September 2025, the GST Council approved significant rate cuts on numerous everyday items.

Key Changes:

  • Rate Reductions: GST rates were reduced on various goods and services, particularly those used by the common man and middle class.
  • Simplified Structure: The GST structure was streamlined to a two-slab structure of 5% and 18%, abolishing the 12% and 28% rates.
  • Exemptions: Individual health and life insurance premiums were exempted from GST.
  • Focus on Essentials: Most items of daily use will move to the 5% bracket with the scrapping of the 12% levy.

Expected Economic Impact:

  • Boost to Consumption: The rationalization of GST is expected to spur consumer demand.
  • GDP Growth: Economists estimate the reform could add 20-30 basis points to GDP growth. Bank of Baroda economist Sonal Badhan estimates that the Centre's decision to rationalise GST rates to two slabs - 5% and 18%, applicable from September 22, 2025, is expected to boost the country's GDP by 0.2-0.3% in the financial year 2025-26.
  • Ease of Doing Business: The revamp will make it easier for companies to function, providing long-term clarity on rates and policy direction to build industry confidence and support better business planning.
  • Relief for Common Man: GST on common man and middle-class items has been reduced from 18 per cent or 12 per cent to 5 per cent.

Contrasting Philosophies

The approaches of Trump and Modi represent distinct economic philosophies. Trump's tariffs reflected a protectionist stance, aimed at shielding domestic industries from foreign competition. Modi's GST relief, on the other hand, is designed to stimulate domestic demand and simplify the tax system, promoting economic growth from within.

While the long-term effects of these policies remain to be seen, they highlight the diverse strategies governments can employ to navigate the complexities of the global economy.


Written By
With a keen interest in sports and community events, Rahul is launching his journalism career by covering stories that unite people. He's focused on developing his reporting skills, capturing the excitement of local competitions and the spirit of community gatherings. Rahul aims to go beyond scores and outcomes, delving into athletes' personal stories and the impact of these events on local culture and morale. His passion for sports drives him to explore the deeper connections within the community.
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