Chidambaram flags export, trade risks in Trump’s ‘weaponisation of tariffs’

Congress leader P Chidambaram on Saturday warned that the renewed use of tariffs by US President Donald Trump as a pressure tool could hurt India’s exports, disrupt global supply chains and weaken the rule-based international trading system.

In a post on X, the former finance minister described Trump’s actions as the “weaponisation of tariffs”, arguing that the imposition of blanket duties for strategic and political leverage rather than to address genuine trade distortions had already caused serious damage to global commerce.

Economists and trade experts said higher US tariffs could reduce the competitiveness of Indian goods in one of the country’s largest export markets. Labour-intensive sectors such as textiles and apparel, gems and jewellery, marine products, engineering goods and auto components are expected to be among the most vulnerable, as even small increases in duties can sharply erode price advantages. Pharmaceutical exports may see limited immediate impact due to regulatory exemptions and long-term contracts, though prolonged uncertainty could weigh on investment and future orders.

Chidambaram noted that unilateral tariff actions undermine the principles of the World Trade Organization, which is designed to resolve trade disputes through a multilateral, rule-based framework. Trade analysts warned that such moves could heighten global trade tensions, weaken confidence in international rules and encourage retaliatory measures by affected countries.

The Indian government has so far adopted a calibrated approach, emphasising dialogue and engagement with Washington to safeguard national interests. Discussions are under way on trade arrangements aimed at restoring predictability for exporters, though Chidambaram questioned whether claims of a balanced India-US trade understanding were borne out by Trump’s assertion that India would continue to face tariffs while the US would not.

Industry bodies said abrupt tariff changes disrupt global supply chains, raise input costs and complicate long-term planning for exporters. Higher costs are often passed on to consumers, increasing the risk of inflationary pressures in multiple economies. Export promotion councils have sought greater clarity and stability in trade terms, warning that uncertainty itself can dampen production, investment and employment.

Trade experts cautioned that continued tariff escalation could trigger tit-for-tat retaliation, slowing global trade flows and disproportionately affecting developing economies. The use of tariffs as a strategic weapon, they said, risks undermining the credibility of the global trading system and harming growth prospects worldwide.