WSJ What’s News - What Trump’s India Tariffs Mean for Global Trade

Episode Date: August 27, 2025

A.M. Edition for Aug 27. As steep duties on a range of Indian products come into effect, the WSJ’s Tripti Lahiri discusses which sectors will be hit hardest, and how the levies could have ripple effects for other economies. Plus, President Trump weighs quickly announcing a nominee to replace Federal Reserve governor Lisa Cook. And WSJ columnist Jinjoo Lee argues that the renewable energy industry can thrive despite the Trump administration’s subsidy rollbacks. Azhar Sukri hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're with Amex Platinum, you get access to exclusive dining experiences and an annual travel credit. So the best tapas in town might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at Amex.ca. president trump wants to quickly replace fed governor lisa cook we'll look at the candidates he's considering plus as punishing tariffs on indian goods come into effect we discuss what that means for businesses

what's particularly concerning for india is that even though the u.s is perhaps about 20% of overall exports out of india a lot of those exports are focused in areas that are kind of labor in intensive. One estimate is the exports to the US drop by 30 or 40 billion dollars. And that's going to be a big hit to India. And how bad is Trump's rollback of green subsidies for the renewables industry? Our columnists take might surprise you. It's Wednesday, August the 27th. I'm Azhar Sukri for the Wall Street Journal. Here is the AM edition of What's News, the top headlines and business stories moving your world today. We report that President Trump has told advisors he wants to move quickly to announce a nominee to replace Lisa Cook, the Fed governor he's trying to oust.

Trump told reporters yesterday that he's thinking of tapping Stephen Myron, a close economic advisor. He's already nominated him to fill a different seat on the Fed's board, but Cook's seat has a longer term. According to people familiar with the matter, another potential candidate is former World Bank Group president. President David Malpass, a close ally of Trump's who has criticised the Fed for not cutting interest rates. Trump is also preparing for a potential fight in the courts, as Cook has said the president doesn't have the authority to fire her and threatened legal action. Steep US tariffs on a range of Indian products have kicked in today after a deadline to strike a deal came and went. An initial 25% tariff on Indian goods came into effect in early August.

But earlier this month, President Trump signed an executive order imposing an additional 25% tariff due to India's purchases of Russian oil, bringing the combined levy to 50%. The journal South Asia Bureau Chief Tripti Lahiri is here to tell us more. Tripti a few months ago, India appeared to be in poll position to strike a deal with Trump, how did we get here? Asar, I think that's exactly the same question many Indian businesses are asking. In India, everybody had looked at Trump's residency as being a good thing for India, that he would focus his trade war on China, and India and USA's would improve, and that would be good for Indian businesses as well, including those businesses that would be part of the US supply

chain as part of some companies China plus one strategy. That's the strategy where companies were trying to diversify out of China. But a lot of things happened. One is that the two countries just simply couldn't agree on a trade deal despite there seeming to be momentum at one point. Another thing is that it seems like the two countries perhaps fell out on things that had nothing to do with trade. One of those things is the India-Pakistan conflict, where President Trump announced that he had brokered a ceasefire between India and Pakistan, while India said repeatedly that that had been negotiated directly. And some political experts think that perhaps that hasn't gone over so well with the White House. So give us an idea of the range of goods that are attracting the new 50% rate.

Who's going to be hit the hardest here? Lots of businesses. And what's particularly concerning for India is that even though the US is perhaps about 20% of overall exports out of India, a lot of those exports are focused in areas that are kind of labor intensive. So it could be apparel manufacturing. It could be shrimp farms. It could be finishing rough diamonds. It could be making leather shoes and carpet weaving. So areas that employ a lot of people. So one analysis I've seen from a trade research firm here, GTI, estimates that perhaps two-thirds of India's $90 billion worth of exports to the U.S. are going to come under this 50% tariff. And if so, there could be a dramatic reduction in exports to the U.S. One estimate is the exports to the U.S. dropped by $30 or $40 billion,

And that's going to be a big hit to India. So what are the ripple effects likely to be across global trade? For example, what does this mean for manufacturers who are looking to get out of China? It depends a lot what business you're in and also maybe how long range you're looking and how much you've invested so far. I think for lots of businesses that were maybe starting to dip their toe into India or, you know, there may be smaller businesses. They may see this and say, you know, at one point it looked like I might get a 20% point benefit from going over to India and that would make it worthwhile to go through the pain of shifting. You know, if it's going to be just a few percentage points difference, it doesn't

really make it worthwhile to shift out of China. So a lot of people are considering whether if there's tariffs everywhere, you know, maybe I stay in China. For some kinds of things, the competitors that India was already looking at, say Bangladesh, Vietnam for apparel, they're continuing to look pretty good. They're at around 20%. So it makes lots of sense to keep doubling down on that strategy, if that was your China plus one strategy. And, you know, in all of these trade tariffs, one thing is that there are lots of exemptions. So it's really hard to get a full picture of everything that's going on. But there are exemptions for pharmaceuticals, which are a big share of India's exports to the U.S.

There are also exemptions for electronics. So, for example, Apple has shifted a lot of iPhone assembly work to India in recent years, and that is not going to be affected. And the last thing that isn't affected is services. In general, so far, Trump has really focused on goods. India does export a lot of technology and financial services around the world, including to the US, but those so far are not on his radar. South Asia Bureau Chief Tripti Lahiri, thank you very much. Thank you for having me.

Coming up, SpaceX pulls off a successful launch for its Starship rocket after a series of setbacks. Plus, we have the scoop on ExxonMobil's secret talks with Russia, those stories and more after the break. You can get protein at home or a protein latte at Tim's. No powders, no blenders, no shakers. Starting at 17 grams per medium latte, Tim's new protein lattes, protein without all the work, at participating restaurants in Canada. The renewable energy industry was left rattled earlier this summer when Trump's big beautiful bill ended subsidies for both wind and solar power.

Stocks of renewable developers have underperformed the S&P 500 so far this year, marking a stark contrast to nuclear and natural gas-heavy power producers like Constellation Energy and Vistra, which are trading at steep premiums. However, WSJ heard on the street columnist Jindu Lee says it's not all doom and gloom for wind and solar, arguing that the rollback in subsidies is a shock the industry can absorb. So wind and solar are no longer the new technologies that they were when they first started receiving subsidies. They've been competitive with natural gas fire generation for at least the past decade. And the other thing to note is that tax credits, while they are very generous, are a very sort of

complicated form of subsidy to use for developers. And so getting rid of that subsidy structure might actually make the financing process for solar and wind easier and more straightforward going forward and possibly even open up more investors. There will be some short-term pain. Bloomberg NEF estimates that there will be 23% fewer new wind, solar and energy storage installations through 2030 than if the tax and spending bill hadn't passed.

But Jinju says the long-term outlook favours renewables. Electricity demand is starting to rise for the first time in a while. And it's not just driven by AI. It's also just the broad shift from fossil fuels to electricity on things like cars and building heating. The distinct advantage that solar and wind have is that they take a shorter time to build. And speed is really important for some of these AI applications. So that sets up wind and solar really well. In other business news today, we are exclusively reporting that ExxonMobil held secret discussions this year with Russia's biggest state energy company, Rosneft. The talks were about the US oil giant resuming work on a massive project in Russia. If both governments approved this as part of a Ukraine peace deal, enticing Exxon back would represent a coup for the Kremlin, but its return depends in part on whether President Trump succeeds in brokering an end to the Ukraine war, or instead Titans sanctions on Moscow.

And SpaceX has pulled off a successful test launch of its Starship rocket. The spacecraft flew through space and deployed a batch of dummy Starlink satellites yesterday, marking a rebound for Elon Musk's rocket after a series of explosions and mishaps during previous test flights. And that's it for what's news for this Wednesday. day morning. Today's show was produced by Kate Bullivant and Daniel Bark. We had additional help from Roya Shahidi. Our supervising producer was Christina Rocca. I'm Azhar Sukri for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.