India’s measured silence on the United States’ sweeping new tariff regime belies the scale of the shock. President Donald Trump’s Liberation Day executive order introduces a new era of protectionism that is more punitive, more ideological and potentially more damaging than anything seen in the modern trading system. From April 5, all goods entering the US are subject to a minimum 10% levy. From April 9, fifty-two major trade partners, including India and China, face an additional surcharge or reciprocal tariff, calculated as half their bilateral trade deficit with the US as a share of total imports. For China, that means a 34% surcharge on top of existing duties, while India faces a 26% hit.On average, the new tariff regime raises the effective duty rate to 26.2%—almost eight times the pre-Liberation Day level of 3.3%. This takes the US back to a protectionist level last seen around the turn of the 20th century, when the post-Civil War industrial surge triggered the first Gilded Age. Trump’s plan is to trigger a second one. The problem is that the world—and the US—is no longer structured to repeat that trajectory.
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