US’ steep tariffs

US President Donald Trump has signed executive orders imposing steep tariffs on three of the US’ largest trading partners — China, Canada and Mexico — which together accounted for 40 per cent of US imports. While Trump views tariffs as a negotiating instrument and a tool to boost manufacturing in the US, protect jobs, and tackle the trade deficit, the Tax Foundation, the Washington-based think tank, has estimated that this measure would amount to an average tax of more than $830 per US household in 2025, besides reducing long-run economic output by 0.4 per cent. As far as India is concerned, it needs to leverage the bipartisan consensus in Washington for strong India-US ties to its advantage and play its cards carefully.

M Jeyaram

Sholavandan, TN

Effect of tax breaks

This refers to ‘We have heard the voice of the middle class: FM’ (February 3). The relief in income tax, for sure, will increase disposable income and hopefully spur consumption. The gap in the number of IT filers and those actually paying any tax calls for corrective TDS/TCS norms aimed at mitigating avoidable procedural hassles to those with less than taxable income. That the tightrope balancing act has left many a capex outlay affected cannot be missed even with the saving grace of prudent fiscal deficit management.

Jose Abraham

Vaikom, Kerala

Private capex

This has reference to ‘A combination of Seven Cs’ (February 3). When private sector investment from corporates is not picking up despite incentives given and introduction of the National Champions concept, the recommendation for State-Level Champions is highly counterproductive. The reasons are not far to seek: such a measure would signal “the most preferred status” to those chosen by the State as Champions, which will have the effect of turning away others who might be willing to invest.

Angara Venkata Girija Kumar

Chennai

Consumption boost

This refers to ‘Tax sops, a response to demand constraints’ (February 3). There is no doubt that significant tax breaks will help boost consumption and spur growth to an extent at least in the short term. Now it is up to the people how to use that money, whether to save and invest or spend. But to sustain the consumption demand for long, there has to be widespread economic growth well supported by both government as well as private capex.

Bal Govind

Noida

Sagacious words

This refers to ‘Assess, don’t judge is former RBI Governor YV Reddy’s mantra’ (February 3). Being able to infuse humour into financial conversations is a rare quality, and Reddy has it in good measure. Everyone needs to learn from his sagacious words such as ‘assess, don’t judge’ and ‘whenever I see the devil, I fight’. These can guide anyone towards a successful working life.

Kosaraju Chandramouli

Hyderabad

Published on February 3, 2025