Trump’s America First Policy: Stakeholders Divided On How It Will Affect India’s Supply-Chain 2025

The president of a logistics advisory firm in Los Angeles, United States, told Bloomberg recently that the country’s logistics players were in a ‘freakout mode’. This was true not only for the US but also for Europe. Amid US president-elect Doland Trump’s tariff threats, the report said that companies are trying to get orders out before he takes over as president. Chinese companies, meanwhile, trying to find buyers outside of the US.

Trump has threatened tariffs on countries across the world, including India. He said “India charges a lot” and his tariff policy would be reciprocal. Trump’s tariff threats are set to disrupt trade in 2025 and in turn global supply chains. The turmoil is already starting in the US, in anticipation of the tariffs.

Arun Kumar, president of the Association of Multimodal Transport Operators of India told The Core, “If there's global turmoil, it will disrupt logistics worldwide, and India will naturally be part of that.”

While the bigger challenge will be for exporters, logistics companies will see an indirect impact. “If there’s less movement towards the West, especially given India’s substantial exports to the US, logistics businesses will naturally see a drop in activity,” Kumar said.

In India, stakeholders and logistics experts that The Core spoke to were divided about whether Trump's policies would affect logistics players in India.

Ajay Srivastava, founder of the Global Trade Report Initiative, told The Core, “Since most shipping companies servicing India are Chinese or European, there’s little cause for concern. While a decrease in export volumes could occur, it’s manageable.”

Pressure On Trade

During Trump's first term, India’s trade history with the US offered a glimmer of resilience. Despite tariffs on metals and other goods, Indian steel exports surged by over 44%. The trade surplus remained solid, highlighting India’s adaptability to restrictive measures.

However, this time Trump seems to be aiming for an aggressive ‘America First’ policy which means keeping America first and focusing on the domestic policies of the US.

“The impact of Trump's 'America First' policy on freight rates and foreign trade movement is something which the supply chain stakeholders will gradually decipher. In the short-term, container freight rates are expected to remain at an elevated level to front-loading of imports into the US to avoid higher tariff impact,” Ravi Jakhar, chief strategy officer at Allcargo Group told The Core.

As the Bloomberg report pointed out, the front loading of goods has already begun in the US. Companies are also either looking for new suppliers and renegotiating their contracts with existing ones.

Trump's policies aim to push manufacturing back to the US while reducing foreign reliance. However, the strategy comes with risks: potential retaliatory tariffs, supply chain disruptions, and rising costs for American consumers.

Joy John, a logistics industry veteran said, "India and the US are undoubtedly among the top trade lanes for India. So, any changes in the US tariffs for Indian goods will have an impact on logistics. As for the specifics—how, when, and by what percentage—that's still unclear.”

But when there are disruptions, there will be challenges. “They drive up the rates there by increasing logistics costs ,and with that comes the question: who will bear the extra cost? Eventually, it all trickles down to the end consumer.”

While retail consumers can delay spending or not spend at all, “for pharmaceutical or life-saving drugs the spending increases immediately”, John pointed out.

What Next?

Trump’s plans of blanket tariffs won’t be that easy to implement. He will likely face push-back from industries within the US. As for tariffs on other countries, including in India, would be dependent on strategic considerations.

Ajay Sahai, director general and CEO of the Federation of Indian Export Organisation told The Core, “While international diplomacy involves each country pushing its interests, which could occasionally lead the US to raise issues for negotiation, I don’t think Indian companies or exports will be specifically targeted by the US.”

While Trump claims that India’s tariffs are high, they are in compliance with World Trade Organization rules. “Even though Trump's claims about Indian tariffs may be overstated, India can seize this moment to strategically review its tariff structure. India’s average tariff stands at 17%, significantly higher than the US’s 3.3%, but comparable to countries like South Korea (13.4%) and China (7.5%),” said Srivastava.

Like many other sectors, the logistics industry is also likely to approach a wait-and-watch policy before taking action.

Chaitaly Mehta, director of EKF Global Logistics, said, “Until policies are finalised and inked, it’s hard to make any concrete comments. What we can do is be prepared. Orders are already coming in, and certain sectors are on the verge of a breakthrough. Our industry is highly fluid, so agility is key. If we’re not ready to handle the demand, multinational corporations could swoop in and take the business.”

Experts believe that wars and disruptions during the pandemic have also taught the industry a thing or two about being prepared for the worst. “Let’s be real—logisticians, especially those in international logistics, are pretty unshockable. Nothing compares to the chaos we faced during the pandemic... sure, new hurdles will pop up, and they won’t be the same as before, but we’ve proven we’re equipped to deal with whatever comes our way,” Kumar said.