US tariff rollbacks open door for India in agricultural trade

The United States has announced sweeping tariff exemptions on over 200 agricultural products and sealed a landmark trade deal with Switzerland, reducing its effective tariff rate by 0.6 percentage points to 12.8 per cent, according to Oxford Economics.

While the macroeconomic impact on the US is modest — shaving just 4 basis points off inflation in 2026 — the move could reshape trade dynamics for emerging markets in Asia.

The rollback primarily targets food products such as beef, coffee, bananas and nuts, previously subject to tariffs as high as 50 per cent. These exemptions come amid growing political pressure to curb grocery inflation ahead of the 2026 mid-term elections. Consumer sentiment in the US remains highly sensitive to food prices, particularly among low-income households.

India, Brazil in focus

The report highlights India and Brazil as strong candidates for near-term tariff reductions, signalling potential relief for exporters of tea, spices and seafood. India, which faces some of the highest reciprocal tariff rates, could benefit significantly if the negotiations fructify. Media reports from President Donald Trump’s trip to Asia suggest that the prospects for a US-Brazil trade deal are favourable. Trade tensions with India may also be near a resolution. Both countries face some of the highest tariff rates.

Asia’s opportunity

Beyond India, other Asian economies — particularly those exporting coffee, tea and processed foods — stand to gain from the US administration’s evolving tariff strategy. If current tariffs were fully passed through to consumers, food prices would rise by 0.9 per cent, underscoring the political urgency behind these exemptions. Analysts expect poultry and fish to feature prominently in the next wave of carve-outs, creating openings for South-East Asian exporters.

Global ripple effect

While the US impact is muted, Switzerland’s GDP growth could rise by 0.4 percentage points in 2026 due to its new trade deal. Commodity exporters like South Africa, Chile and Peru will also see effective tariff rates fall by 4 percentage points or more. For Asia, the latest developments signal a window of opportunity to deepen trade ties with the US amid shifting global supply chains.

Published on November 20, 2025