Trump's Tariff Threat on Iran Trade: Potential Impact on Global Markets

KATHMANDU — U.S. President Donald Trump has announced a 25% tariff on any country that maintains commercial relations with Iran. This declaration is expected to increase uncertainty in global trade.

Stakeholders suggest that this decision will have an indirect but clear impact on the agricultural export sectors of various countries, including India, particularly regarding Basmati rice exports. Iran is one of the primary destinations for Basmati rice exported from India. 

However, Trump’s proposed policy of punishing third-party countries that trade with Iran is expected to complicate payment processes, increase transaction risks, and weaken buyer confidence. Industry experts express concern that this decision could create additional challenges for a market already under pressure.

There are fears that Trump's tariff announcement may discourage international banking channels and insurance companies from handling transactions linked to Iran, affecting even the trade of essential commodities like food. This could force exporters to re-evaluate shipments based on insecure or delayed payment terms.

The IREF (Indian Rice Exporters Federation) has advised exporters to adopt secure payment systems and diversify into alternative markets in West Asia, Africa, and Europe to mitigate potential risks. 

The federation concluded that since prolonged uncertainty could pressure farm-gate prices and increase storage costs, it is essential to activate alternative markets in a timely manner. — AANI