Donald Trump announces sweeping 'reciprocal tariffs' hitting both allies, competitors

The announcement paved the way for a dramatic escalation of an international trade war that economists warn could fuel inflation even in India.

Speaking in the Oval Office, Trump announced the imposition of reciprocal duties citing that US allies were often "worse than our enemies" on matters of trade.

The levies would be tailored to each US trading partner and consider factors including value-added tax (VAT).

Trump has announced a broad range of tariffs targeting some of the biggest US trading partners since assuming office on Jan 20.

He has justified his actions by saying these would help tackle unfair practices -- and in some cases using the threats to influence policy.

The US president has said the move to impose tariffs is a way to raise revenue, remedy trade imbalances, and pressure countries to act on US concerns.

Trump's announcement came hours before he was due to meet Prime Minister Narendra Modi for bilateral talks in Washington.

It remains unclear when exactly the tariffs would take effect if imposed.

Analysts have warned that reciprocal duties could bring a broad tariff hike to emerging market economies such as India and Thailand, which tend to have higher effective tariff rates on US products.

Countries such as South Korea that have trade deals with Washington are less at risk from this move, according to analysts.