Tamil Nadu braces for US tariff shock

CHENNAI:

Tamil Nadu is prepared to absorb the impact of new US tariffs, State Industries Minister Dr TRB Rajaa said on Thursday, after US President Donald Trump announced a 25% duty on goods imported from India, escalating trade tensions between the two countries.

Speaking on the sidelines of the second edition of Passenger Vehicle Expo, Dr Rajaa said India’s most industrialised state had already laid contingency plans to shield key sectors such as manufacturing, textiles, and footwear from sudden trade shocks. “We’ve seen the Covid impact, we’ve seen global disruptions,” he said. “If there’s one state that’s resilient enough to weather this, it’s Tamil Nadu.”

Dr Rajaa said he was “unhappy” with Trump’s rhetoric. “As an Indian, and as a representative of Tamil Nadu, I found the language disturbing. But we will stand by the Union government and hope the Prime Minister and his Cabinet respond with wisdom, balancing the interests of our farmers, the primary sector, and industry.”

Dr Rajaa warned against overinterpreting the tariff move based on a single post. “This is diplomacy in trade between two of the world’s largest economies,” he said. “It’s unfortunate the US President chose such a platform for such a major announcement. But I trust Prime Minister Narendra Modi will respond in the appropriate format.”

He added that President Trump “doesn’t seem to understand the Indian economy too well” and underestimated the resilience of large industrial states. “States like Tamil Nadu and Maharashtra are robust enough to take the hit. But I do worry about states that haven’t balanced services and manufacturing,” Rajaa said.

Anticipating shifts in global trade policy, Tamil Nadu had already begun building buffers, including diversified export strategies and new market linkages. “We’ve moved from leather to non-leather in footwear. Today we command 38% of India’s non-leather footwear exports — and it’s growing,” he said. “We’re not a state that puts all its eggs in one basket.”

The minister said Tamil Nadu was actively exploring new opportunities in technical textiles and had forged new trade ties with countries in East Asia and Europe. “Tamil Nadu is not reactive. We anticipate disruptions. That’s why we are India’s number one industrial state,” he said.

On August 4, Vietnamese EV major VinFast will unveil its integrated manufacturing plant in Thoothukudi — a cornerstone in Tamil Nadu’s electric mobility ambitions. The event will also mark the launch of TN Rising, a mini-investors’ conclave modelled on the Global Investors Meet, this time with a focus on the state’s southern districts.

“We want to showcase the full industrial potential of Tamil Nadu beyond Chennai,” Rajaa said, adding that a number of MoUs are expected to be signed at the event.

Despite the external volatility, the minister remained upbeat: “To our industries, I say this — don’t worry, we’ve got your back. The threat of tariffs will only strengthen our resolve to expand faster.”