Finshots Daily Part 2: What will happen if India gets a 500% tariff?
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Jan 25, 2026 A sequel probes whether the US could actually impose a 500% tariff on Indian goods and what that would do to prices. It covers exporters’ reactions, who ends up bearing tariff costs, and an iPhone pricing thought experiment. Discussion also looks at supply-chain rerouting, gems and jewellery impacts, services and GCC pullbacks, and the broader cost to US consumers and firms.
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Tariffs Cut Volumes Not Exporter Margins
- When the US imposed a 50% tariff, Indian exporters protected margins rather than cut prices, causing volumes to fall by 18–24% to the US.
- This shows tariffs reduced trade flows but did not make exporters absorb the tax burden.
iPhone Example Shows Tariff Fallout
- The podcast uses iPhones as a concrete example to show how a 500% tariff would balloon prices from $800 to $4,800 and eliminate demand.
- Apple would reroute production back to China, Vietnam or Mexico, wrecking its India diversification plan.
Diamonds Would Vanish From US Shelves
- A 500% tariff on gems would make typical rings unaffordable and sharply reduce imports into the US.
- US jewellers would scramble for alternatives or carry much less inventory, raising retail prices.