Trump’s tariff blitz to weigh on Indian rupee, hurts Asia FX

MUMBAI, July 9 (Reuters) – The Indian rupee is poised to open weaker on Wednesday, pressured by a renewed tariff barrage from U.S. President Donald Trump that widened the scope of his trade offensive.

The 1-month non-deliverable forward indicated an open in the 85.74 to 85.78 range, versus 85.6950 in the previous session.

“Trump keeps dropping headlines that make life tough for EM FX, and the rupee will react in kind,” said a Mumbai-based currency trader at a bank.

“If flows stay thin, we’re heading right back to test the 85.90–86.00 zone”, he said, noting that area has consistently acted a support level for rupee in recent sessions, with exporter orders lined up around those levels.

Trump said he would impose a 50% tariff on imported copper and introduce long-mulled levies on semiconductors and pharmaceuticals, further ramping up his trade war. Trump threatened of 200% tariffs on drug imports, which he said could be delayed by about a year.

A 200% pharma tariff would sharply raise the value-added U.S. tariff on Singapore, with India, Korea, and Malaysia witnessing a notable impact, Barclays said in a note. By contrast, a 50% copper tariff would have only a marginal effect on EM Asia, it said.

Further, Trump reiterated a 10% tariff threat on goods from India and other BRICS nations.

The measures mark a escalation in Trump’s trade war rhetoric, coming just a day after he targeted 14 U.S. trading partners, including major suppliers like South Korea and Japan, with higher tariffs.

Trump’s comments at a White House cabinet meeting risk adding to the uncertainty already roiling the world economy, which has been rattled by the imposed and threatened tariffs.

The dollar index rose Wednesday, heading for a third straight daily advance, underpinned possibly by safe-haven demand.

Asian currencies slipped, while equity markets across the region posted declines.