0:01 my fellow Americans this is liberation day this is the state of business owners across India a lot of export orders have been put on hold by the American buyers local manufacturers are not able to compete with these Chinese products i think the situation from here will worsen only from garment makers to small vendors on streets everyone is scared but this is not because of any policy by some minister or some protests it's because of one single man starting tomorrow the United States will implement reciprocal tariffs on other nations since coming back to power Donald Trump has started a trade war which is making the world dance the dumbest trade war in history just a big
0:46 mess don't believe that we should be spending our money in America he has imposed paused and threatened to reciprocate tariffs they do it to us and we do it to them and what's caught my attention is that Trump is not targeting China alone but he's also coming after his allies including India in fact Trump's projected tariffs against India could see us lose 58,000 crores every single year trump has called India the biggest abuser of tariffs and placed a 26% tariff on all our goods though he has announced a 90-day pause on them recently and has placed a reduced tariff rate of 10% his actions have already caused massive disruptions investors have lost 14 lakh crores in the stock market india's GDP growth is at risk and
1:32 this has created an uncertainty that could affect millions of lives see the US is one of our largest trade partners and ever since he came back there's a genuine feeling of panic among people you know every business meeting that I've been to lately the word tariff has been mentioned almost every time i wanted to understand the situation better so I sent my team to find out what is happening on ground with business owners and understand why there is such a big feeling of distress related to tariffs now you might be like I don't care about this i'm just doing my job or studying why should I even care but the ripple effects of this runs deeper than you realize and in today's interconnected economy international trade policies don't remain confined to political headlines they directly shape our economic environment so understanding these shifts isn't just
2:17 good awareness it is essential but before I do this I want to tell a story a story of how this all started if I were to ask you that if given a choice which country would you settle in i'm sure for a lot of you the answer would be America and you're not alone since decades America was the land of dreams and opportunities for millions across the board it's a place where fertile minds have come together and created empires beyond human imagination but what a lot of you might not know is that America's prosperity did not happen because of its creative and entrepreneurial spirit alone what actually started it all were today's dreadful tariffs let me explain so
3:03 tariff is basically a tax that you have to pay to the government if you're buying a product from another country and long before the US became a world leader and when global trade was dominated by the British tariffs became a key part of the US economic policy you see back in the 18th century the British had the roads infrastructure factories and transport networks which helped them manufacture superior products and export them to the world so America's founding fathers realized that competing with them would be impossible so after America became independent in 1789 they passed a tariff act that placed a 5% tax on goods other countries sent on American soil this move was key for America as it not only protected growing local industries from competition but also helped in opening up new sources of revenue in fact between 1798 to 1913
3:52 tariffs contributed 50 to 90% of revenue to the US government and since they had made buying goods from other countries expensive Americans toiled and worked to become self-reliant and industrialized rapidly it's basically a strategy that not only America but countries like Soviet Union China and even we here in India have used to grow in fact you must have read in your school textbook right that before India opened up its economy if you had to import something from outside you would have to obtain a license some of the agricultural and textile products which were imported from outside had tariffs which were higher than 300% you know till today we blame those strict protectionist and closed economy policies for keeping us behind China but that's an argument for another day the reason why we China the
4:38 US and many other countries have used a lot of tariffs in their early days is because tariffs according to economists are actually good when a country's industry is growing the basic idea here is that tariffs help local manufacturers to become strong and scale which would help them to take on foreign competition in future you know there's a broader lesson here at every scale countries industries and even individual businesses growth always involves navigating a delicate balance between protection and exposure too much safety and you never become strong enough to compete too little and you risk getting crushed before you even find your footing and this is not only true for nations or big industries is equally true if you're trying to build something today it doesn't matter whether you're running a company making art selling a product or just trying to get freelance
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6:57 now is a smart time to build your space online so in 1929 the American economy was at its lowest point the stock market had crashed wiping billions of dollars unemployment was at its peak and industrial production had fallen by nearly 50% in this chaos the US government passed an act in 1930 called the Smooth Holly Tariff Act the goal of this act was to protect struggling American farmers and manufacturers by imposing some of the highest tariffs ever recorded in American history of 20,000 imported goods for context the average tariffs on imported goods had increased from 38.5% to 60% with certain products like wool and sugar having a 100% tariff but
7:44 this became an economic nightmare countries like Canada France and Germany whose products the US had imposed a tariff on retaliated they essentially placed their own tariffs which led to a trade war and decreased global trade by more than 60% you know many American exporters in industries like agriculture suffered massive losses as they lost access to key markets abroad and instead of helping the economy the tariffs worsened the Great Depression even though tariffs played a crucial role in helping America grow it also taught them a lesson which led them and other countries to move towards free trade policies and reduce trade barriers and you know one of the biggest benefits of this shift ended up benefiting us that's India
8:29 the Trade Act of 1974 which I'm signing into law today will determine for many many years American trade relations with the rest of the world so what you just saw was one of the most important trade policy announcements that the US made in the modern era the 1974 trade act was one of the key reasons that India was able to put its name on the global trade map and the US our biggest export destination the act gave birth to something called the generalized system of preferences or GSP under this program America allowed some developing countries like Brazil and India to export goods to US without paying any tariffs the US in return would access the local markets which created a mutual relationship between
9:15 the countries this was a gamecher for the Indian economy you see before the introduction of GSP if you were a leather bags and shoes manufacturer you could not even think of exporting your products to America this was because the import duties on leather goods were extremely high so while an Americanmade leather bag might sell for $50 your Indian-made bag despite being just as good could end up costing much more after tariffs because of this no American buyer would buy your products but the introduction of GSP opened up massive export opportunities for Indian industries like textile gems jewelry and leather over the years our exports to the US have grown in numbers there's a caveat which I wanted to mention here though not every export item of the industries got the GSP benefits but
10:02 still because of this benefit Indian products which are imported to the US are charged just 2.8% at 8% tariffs compared to 7.7% we charge on US imported products based on weighted average this is one of the reasons why Donald Trump is now looking to impose reciprocal tariffs on Indian goods in fact during his first term as a president Trump removed the GSP status of India this did not have a significant impact on our exports to the US a major reason behind this was that the amount of Indian goods exported under the GSP rule remained at just 12% of the total exports now you might think that the reciprocal tariffs the US is threatening us with won't hurt us too but this time even before the tariffs have been placed they've already started hurting India
10:48 i'll talk about this later but first I want to tell you how tariffs which Trump sees as a way to make America great again are a big mistake and will harm the US consumers in fact Americans experienced this pain because of what Trump did with washing machines in his first year as a president you see back in 2018 Trump placed tariffs on washing machines created in China and South Korea because he thought we're going to create a lot of jobs but what ended up happening was that the tariffs not only increased the cost of imported machines but also led to local companies increasing cost of their own machines on the other hand dryers which were not subject to any tariffs but because they were sold together with the washing machines also saw an increase in their prices but you know what was more shocking a report found that the price increases of both the washing machines
11:34 and drying machines led to a tariff elasticity of above one in simple words it meant that the American consumers paid more money because of the increase in tariffs than what the government actually collected from them it wasn't all bad though a study found that these tariffs have been creating 1,800 new jobs the US government also earned $82 million from them annually but because of the price increases it cost consumers $1.5 billion and this meant that the US consumers had to pay 815,000 to create all of those new jobs in fact a study by Moody's found that the tariffs and the trade war in Trump's first year led to 300,000 lesser jobs in America this is the reason why economists consider tariffs as bad
12:20 especially for creating jobs so what does it mean are tariffs bad or tariffs good the answer is a little complex you see there are two main purposes of tariffs to reduce dependency on other countries and trade imbalances but whether this happens or not depends upon the type of tariffs that a country uses what do I mean by this well economists you see have categorized tariffs into two types the targeted and broad tariffs so when a country slaps up a tax on specific goods of an industry which are imported from another country say for example batteries then it's a targeted tariff the idea here is to reduce dependency for a particular good on other countries and encourage local manufacturing and innovation in the particular sector on the other hand when
13:07 a tariff is placed on different types of products from a specific country or all other countries it's a broad tariff the 25% tariff that Trump has recently announced on steel and aluminium imports from all other countries to America is an example of a broad tariff and this is going to be a disaster for America let me explain how seven of Trump's goals is to reduce America's trade deficit with other countries and just so you know America is the world's main country that buys more than it sells while China is world's main country that sells more than it buys but placing broad tariffs is going to have almost zero effect in fixing this the first reason behind this is because of exchange rate adjustment how this works is suppose you're an American businessman buying goods from China to do that you need to swap your
13:53 dollars for Chinese one now the rate at which dollars are exchanged for one is called the exchange rate now when the US imposes tariffs on Chinese goods it reduces demand for those goods and when Americans aren't buying as much from China they don't need as much this basically causes the yuan's value to drop while the dollar becomes stronger because fewer dollars are being exchanged for yuan so as you can imagine when the yuan gets cheaper they make Chinese goods also cheaper for you as an American buyer even with the tariffs in place on the other hand a strong dollar makes American goods more expensive for Chinese customer this is basically what's known as exchange rate adjustment exchange rate adjustment can cancel out much of the intended effect of broad tariffs making them less impactful than
14:41 they might seem in fact a research paper by the John Hopkins University found that the exchange rate adjustment cancelled out up to 75% of the effects of the tariffs Trump had placed on Chinese goods during his first year of presidency secondly broad tariffs end up increasing the cost for manufacturers take the case of auto industry steel and aluminium are key materials for manufacturing cars but with 25% tariffs on them American car companies like GM Ford and Tesla will now face higher production costs to make up for those costs they would have to raise the prices for their cars making them less competitive in the US market at the same time these manufacturers will pass on the increased cost to the consumers and according to the New York Times new car
15:26 prices for the US consumers could rise by minimum around $4,000 so because of this increase in manufacturing and consumer cost Americans are already pissed with Trump's tariff policies although he has currently passed tariffs against Canada and Mexico tariffs against China have been doubled and they have retaliated back and remember that I said tariff threats have already started hurting India well this is because the fire Trump has started in its war with China has already started burning Indian businesses i've got some big news to share so AV is expanding and we are on the lookout for senior motion graphic designers who have at least 2 years of experience to join our team so if you're somebody who's obsessed with pushing the boundaries of video and want to work with some of the best editors filmmakers
16:13 cinematographers and like experimenting with geni film making storytelling this is your place our goal is to create the best videos the internet has ever seen and if you want to be part of a team that's redefining video apply now or share this with somebody who should before the trade tensions between America and China escalated into an outright trade war India was already facing significant economic challenges particularly related to China's practices of dumping goods you see dumping occurs when a country exports products at prices lower than the production cost or below the local market rate aiming to undermine local competition and dominate the market economists refer to the disruptive
16:59 economic impact from China's aggressive pricing strategy as a China shock you know China has extensively employed dumping tactics in various industries crucial to India such as steel metals plastics chemicals textiles and electronics these artificially lowpriced imports have forced many Indian businesses to struggle or even shut down due to their inability to compete with significantly cheaper goods and this phenomena isn't limited to India alone vietnam and Indonesia among other South Asian nations have also faced similar disruptions for instance Indonesia's textile industry reported potential job losses for nearly 500,000 workers due to aggressive Chinese dumping practices prompting government action including
17:44 restrictions on Chinese e-commerce platforms addressing this issue isn't as straightforward as imposing retaliatory tariffs on Chinese imports india's manufacturing sectors including pharmaceuticals electronics automobiles and even textiles heavily depend on raw materials and components sourced from China therefore while India faces immense pressure from cheaper dumped goods hurting local businesses it simultaneously confronts a complicated reality we cannot abruptly severely restrict import from China without potentially crippling entire industries dependent on these vital supplies simultaneously America's trade actions against China indirectly worsen India's dilemma as the US imposes higher tariffs on Chinese products China looking for alternative markets to maintain economic
18:30 stability intensifies its dumping strategies in countries like India consequently Indian businesses are the one that are caught in an increasingly complex geopolitical crossfire if you're an Indian entrepreneur founder or even just starting out professionally understanding these dynamics is very crucial because whether you're building a D2C brand working in tech consulting or even studying for your next opportunity you're not isolated from these global ripples you're part of them even if tariffs don't affect your work directly the instability they create impacts everything consumer confidence investor sentiment hiring decisions even how aggressively you can scale tariffs might seem distant something discussed only in newsrooms or political debates but they are reshaping the economic
19:17 environment in which your career or business is being built india's position right now is uniquely challenging we can't simply turn off our economic ties with China overnight nor can we ignore America's unpredictable tariff policies navigating this tension requires careful thought precise strategy and most importantly awareness because at the end of the day this isn't just about trade or economics it's about learning how interconnected and sometimes fragile the systems we depend on really are and if you can understand those connections clearly you're not just better prepared you have an edge the smartest founders entrepreneurs and students I know are the ones who stay ahead by seeing these bigger patterns early on tariffs trade wars geopolitical shifts these aren't
20:03 just headlines they are signals signals that tell you exactly what kind of future you'll be building in
