Aug 4: Tariff tsunami hits home, US jobs report cries crisis

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Now, let’s get into the Dispatch! 🚀

Today’s reading time is 4.5 mins.

In a bold shift, U.S. President Donald Trump imposed a 25% tariff and an additional ‘penalty’ on Indian goods starting August 7—higher than tariffs on over 50 other nations. For context, neighbouring countries such as Bangladesh and Pakistan face just 20% and 19% tariff rates, respectively, raising questions about strategic favouritism.

Government’s Response: The commerce ministry is still studying the ‘implications’ of Trump’s announcements. However, it has reiterated that the welfare of farmers, entrepreneurs, and MSMEs remains a top priority. The agricultural and dairy sectors continue to be key obstacles in trade negotiations between the nations.

Hot-and-Cold Diplomacy: Despite Trump’s friendly rhetoric of calling India a “good friend,” his tariff decisions underscore skepticism rooted in India’s arms and energy ties with Russia and its ongoing BRICS membership. From 2021 to 2025, the U.S. remained India's top trading partner, with bilateral trade reaching $186 billion in 2024.

Sector-wise outlook: As highlighted in our earlier report, the jewellery sector, a key export driver and employer of nearly 5 million Indians, is particularly vulnerable. Industry leaders warn that over 1 lakh jobs are at risk. Meanwhile, pharmaceutical companies, which’ve long relied on the U.S. for nearly 30% of their exports, fear disruption to their $87 billion dream run.

Oil Pause Amid Pressure: While state-run refiners paused spot-market Russian crude purchases last week, officials confirm that long-term deals remain untouched. Notably, India is the third-largest crude oil importer and the top buyer of Russian oil.

With exports at risk and energy security in question, India’s next moves could define not just its trade policy, but also its global positioning.

Marcos Jr. touch down in India: Philippines President Marcos Jr. will visit India from August 4-8, marking the 75^th anniversary of India-Philippines diplomatic relations. He'll meet PM Modi and President Murmu to discuss bilateral cooperation and regional issues, marking his first trip to India since taking office.

AP’s electronic boost: On Friday, Andhra Pradesh approved a $600 million incentive scheme to boost electronics manufacturing in the state. It aims to attract investments, reduce dependence on China, and quadruple India's electronic production to $500 billion by 2030.  

Bharat Taxi rolls out: Eight cooperatives are set to launch a new taxi service called “Bharat,” with Rs 300 crore in authorised capital and 200 drivers. The goal: challenge sector giants like Ola and Uber, aiming to provide better driver earnings and safer, more affordable rides.

What’s the damage?

July's US jobs report landed with a thud: the economy added a measly 73,000 jobs, mostly in healthcare, while massive downward revisions for May and June revealed the market was already stagnant. With unemployment ticking up to 4.2%, hiring isn't even keeping pace with population growth, sparking serious recession fears. 

Key Highlights

Why this report is a big deal: The monthly jobs report is the US economy's official report card. As the first major economic data drop of the month, a weak report tells investors that businesses are hitting the brakes on hiring, a classic warning sign of a slowing economy. 

The final take: This dismal data puts the Federal Reserve under immense pressure to cut interest rates, especially as tariff-sensitive industries lose jobs and the labour force shrinks. Adding to the drama, a departing Fed governor gives Trump a chance to appoint an ally.

Microsoft joins the $4T club: Microsoft's market cap surpassed $4 trillion for the first time after a strong earnings report. The company reported 18% revenue growth, its fastest rate of expansion in over three years, powered by its booming cloud and AI businesses. Microsoft is now the second company to join the $4 trillion club, following Nvidia earlier this month. 

OPEC+ turns up oil tap: OPEC+ will boost oil production by 547,000 barrels per day in September, accelerating its bid to regain market share after reversing major output cuts. The move comes as the U.S. pressures India to halt Russian oil imports, hoping to push Moscow toward Ukraine peace talks. Despite the extra supply, Brent crude remains strong at around $70 a barrel, thanks to robust demand and tight stocks.

Tarriffs hit countries: The Trump administration has announced new reciprocal tariffs on dozens of countries, with rates from 10% to 41%, effective August 7. Key partners like the EU will face 15% duties, with India at 25%. A 40% duty will also be levied on transshipped goods. This move has caused global stock markets to tumble.  

Tesla’s Autopilot verdict: In a landmark judgment, a Florida jury ordered Tesla to pay $243 million for a fatal 2019 crash, finding the company liable. The verdict includes compensatory and punitive damages, and Tesla plans to appeal the decision. This is a significant blow for Tesla’s driver-assistance technology.

FIGMA IPO pops: Figma, a design software company, launched its IPO on the NYSE under the ticker "FIG," raising $1.2 billion. The shares opened at $33 and skyrocketed more than 250%, reaching $121.59 as of writing.

AI storytelling goes prime time: Fable's new AI-powered platform, "Showrunner," lets users create animated shows or scenes from simple text prompts. Backed by an undisclosed investment from Amazon and hyped by Fable as the "Netflix of AI", the platform could be a potential disruptor in the storytelling world.

South Park hits TV ratings: The Season 27 premiere of "South Park," titled "Sermon on the 'Mount," achieved its highest viewership since 1999 with 5.9 million viewers across all platforms. The viral hit was due to its controversial and satirical content mocking Donald Trump, portraying him in a compromising relationship with Satan.

Himachal on the brink?: The Supreme Court has warned that Himachal Pradesh is at risk of "vanishing" due to ecological imbalance, blaming unchecked construction and deforestation for pushing the situation "from bad to worse."

AIFF’s desi dugout: Former Aizawl and Jamshedpur FC manager, Khalid Jamil, is India's new men's football head coach. A former player with a strong domestic coaching record, he's the first Indian to hold the post since 2012.

SRK goes national… finally: After a 33-year career, Shah Rukh Khan, India's biggest star, has finally won his first National Award for Best Actor for his role in "Jawan", marking a significant milestone in his illustrious career.

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