US President Donald Trump has announced plans to raise tariffs on imports from India. He pointed to India’s purchase and resale of Russian oil as a reason for this increase. Tariffs are fees placed on imported goods, designed to help local businesses compete. While both tariffs and taxes raise money for the government, tariffs are paid when goods arrive at ports, whereas taxes are paid at the time of purchase. Economists have mixed opinions on tariffs. Some think they protect local industries, while others believe they may lead to higher prices and trade disputes. During his 2024 campaign, President Trump said he wants to use tariffs to strengthen the US economy and lower personal income taxes. In 2024, Mexico, China, and Canada made up 42% of all US imports. Mexico was the largest exporter, sending $466.6 billion worth of goods, as reported by the US Census Bureau. Trump plans to focus his tariff strategy on these countries. The news about tariffs on India has already shaken up the markets. The VIX, which measures market fear, rose over 15%, reaching above 22 in early trading. This spike suggests that traders might want to buy options to protect against increased market volatility over the next few weeks. For currency traders, the Indian rupee is a key focus. It has already fallen below 85 against the dollar due to the news. We’re paying attention to how New Delhi might respond, which could involve retaliatory tariffs and further pressure on the rupee. For now, short positions on the rupee or put options on Indian ETFs seem appealing. This situation feels similar to the trade issues with China that started in 2018. Back then, there were major disruptions in tech and manufacturing supply chains, hurting specific stocks. We should look back at those times to see which sectors might be hit hardest now. While India is currently in the spotlight, the 2024 campaign agenda also highlights Mexico and Canada. With Mexico’s exports to the US reaching a record $475.6 billion in 2024 and still growing in early 2025, it’s a prime target for future tariffs. Traders should assess how this could impact the Mexican peso and Canadian dollar. The reason behind these tariffs—India’s resale of Russian oil—brings attention back to energy markets. This move could disturb global oil flows and create uncertainty in prices for Brent and WTI crude. It might be wise to consider long-dated call and put options on oil futures to prepare for possible price changes.

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