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Month: August 2025

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Mutual Funds vs Fixed Deposits: Which is Better in 2025?

Mutual Funds vs Fixed Deposits

When it comes to parking your savings, two of the most popular options in India are mutual funds VS fixed deposits (FDs). Both investment avenues have unique features, benefits, and limitations. If you’re wondering which is better – FD or mutual fund – this detailed guide will help you make an informed decision.

1. Understanding the Basics

Fixed Deposits (FDs)

A fixed deposit is a traditional savings instrument offered by banks and NBFCs. You invest a lump sum for a fixed tenure at a predetermined fixed deposit interest rate, and you receive guaranteed returns at maturity.

Key features of FDs:

  • Capital protection – principal amount is secure.

  • Fixed, predictable returns.

  • No market-linked risk.

  • Suitable for conservative investors.

Mutual Funds

A mutual fund pools money from multiple investors and invests in stocks, bonds, or other securities, managed by professional fund managers.

Key features of mutual funds:

  • Returns depend on market performance.

  • Can be equity-oriented, debt-oriented, or hybrid.

  • Flexible investment options via SIP or lump sum.

  • Potential for higher returns compared to FDs.

2. Mutual Fund vs FD Returns

When comparing mutual fund vs fixed deposit interest rate, the difference is significant:

  • FD interest rates in 2025 typically range between 6% – 7.5% p.a. depending on tenure and bank.

  • Debt mutual funds can generate around 7% – 8% p.a., while equity mutual funds have the potential to deliver 10% – 15% p.a. or more over the long term.

Key takeaway: FDs offer guaranteed but moderate returns, while mutual funds can offer higher returns but with varying levels of risk.

3. Risk Factor – Safe Investment FD vs Mutual Fund

  • FDs are low-risk since returns are fixed and not affected by market volatility.

  • Mutual funds carry risk, especially equity-oriented ones, since returns fluctuate with market conditions.

  • Debt funds are relatively safer than equity funds but not entirely risk-free.

Conclusion: If safety of capital is your top priority, FDs are safer. If you can tolerate some market volatility, mutual funds may deliver superior returns over time.

4. Tax Benefits – FD vs Mutual Funds

  • Tax on FDs: Interest earned on FDs is fully taxable as per your income tax slab. There are no special tax benefits unless you invest in a 5-year tax-saving FD under Section 80C, which has limited deduction benefits.

  • Tax on Mutual Funds:

    • Equity funds: Long-term gains (after 1 year) are taxed at 10% (above ₹1 lakh), while short-term gains (before 1 year) are taxed at 15%.

    • Debt funds: Gains are taxed as per your income slab (post recent changes removing indexation benefits).

Verdict: Mutual funds can be more tax-efficient, especially equity funds, if held for the long term.

5. FD vs Mutual Fund Investment Comparison

Criteria Fixed Deposit (FD) Mutual Fund
Returns Fixed (6% – 7.5%) Market-linked (7% – 15%+)
Risk Very low Low to high depending on type
Liquidity Premature withdrawal penalty Flexible redemption (may have exit load)
Taxation Interest fully taxable Tax-efficient for long-term equity funds
Investment Mode Lump sum only SIP or lump sum
Best For Conservative investors Growth-oriented investors

6. Best Investment in 2025 – FD or Mutual Fund?

  • Choose Fixed Deposits if:

    • You want guaranteed returns.

    • Your priority is safety over growth.

    • You have a short investment horizon.

  • Choose Mutual Funds if:

    • You seek higher long-term growth.

    • You are comfortable with market-linked risk.

    • You want flexibility through SIPs or diverse options (equity, debt, hybrid).

Bottom line: There is no single “better” option – it depends on your goals, risk tolerance, and investment horizon. A balanced portfolio can include both FDs for safety and mutual funds for growth.

7. Mutual Funds vs FD Risk and Returns – Final Verdict

If your priority is capital protection, FDs are safer. If your goal is wealth creation, mutual funds are better in the long run. Evaluating the difference between mutual fund and fixed deposit helps you diversify and make smarter decisions.

In 2025, with rising inflation and moderate interest rates, a combination of FDs and mutual funds can help you balance safety, returns, and tax efficiency.

Final Thought: When it comes to mutual funds vs fixed deposits, there’s no universal winner – the best investment strategy is one aligned with your personal financial goals, time horizon, and risk appetite.

How to Invest in Mutual Funds

Getting started with mutual fund investing is simpler with GCIC Finserv. Contact us now

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Tax on Mutual Funds Explained: Save More, Invest Smarter

Tax on Mutual Funds Explained

Investing in mutual funds is a popular way to grow wealth, but understanding tax on mutual funds is equally important to maximize your returns. Taxes directly impact your investment gains, and with the right approach, you can save significantly. This mutual fund taxation guide explains how mutual funds are taxed, the rules to watch in 2025, and strategies to make your investments more tax-efficient.

How Mutual Funds Are Taxed

Mutual funds earn income either through dividends or by appreciation in value, which you realize when you sell your units. The tax treatment differs depending on the type of fund and the holding period:

  1. Equity Mutual Funds (funds holding at least 65% equity):

    • Short-Term Capital Gains (STCG): If units are sold within 12 months, gains are taxed at 15%.

    • Long-Term Capital Gains (LTCG): If held for more than 12 months, gains above ₹1 lakh in a financial year are taxed at 10% without indexation.

  2. Debt Mutual Funds (funds holding mostly fixed-income instruments):

    • As per mutual fund tax rules 2025, all gains from debt funds are taxed as per your income slab, regardless of the holding period. Indexation benefits are no longer available.

  3. Hybrid Funds: Tax treatment depends on the proportion of equity and debt in the portfolio.

Knowing capital gains tax on mutual funds is essential for accurate planning of redemption and reinvestment.

Dividends and Income Tax on Mutual Funds

Earlier, dividends were tax-free in the hands of investors because mutual fund houses paid Dividend Distribution Tax (DDT). Now, dividends are added to your total income and taxed as per your slab. Hence, regular dividend payouts can increase your tax liability.

If you’re investing for regular income, consider tax-efficient mutual fund investing strategies such as Systematic Withdrawal Plans (SWPs) from growth options instead of relying on dividend payouts.

Tax Saving Mutual Funds (ELSS)

Equity Linked Savings Schemes (ELSS) are tax saving mutual funds that allow you to claim deductions up to ₹1.5 lakh under Section 80C of the Income Tax Act. They:

  • Have a mandatory lock-in period of 3 years.

  • Offer potential for higher long-term returns due to equity exposure.

  • Provide mutual fund tax benefits that help you lower taxable income while building wealth.

If your goal is to save tax with mutual funds, ELSS is among the most effective options.

Key Mutual Fund Tax Rules for 2025

With tax regulations evolving, here are the latest mutual fund tax rules 2025 to remember:

  • Debt fund gains are fully taxed at your income slab rate—no indexation.

  • ELSS continues to provide Section 80C tax benefits.

  • Long-term capital gains on equity funds above ₹1 lakh are taxed at 10%.

  • Dividends are fully taxable in the hands of investors.

How to Make Your Mutual Fund Portfolio Tax-Efficient

  1. Invest for the long term: Holding equity mutual funds for more than 12 months reduces tax rates.

  2. Use ELSS for deductions: Max out your Section 80C limit to save tax with mutual funds.

  3. Prefer growth options over dividends: They give you control over when you incur tax.

  4. Plan withdrawals smartly: Redeem units gradually to stay within the LTCG exemption limit of ₹1 lakh.

  5. Consult a tax advisor: Tax laws change frequently, so keep your portfolio aligned with the latest rules.

Conclusion

A clear understanding of how mutual funds are taxed helps you make informed decisions and keep more of your earnings. Whether you’re investing in equity funds, debt funds, or tax saving mutual funds, knowing the latest mutual fund tax rules 2025 ensures smarter planning. By adopting tax-efficient mutual fund investing, you can minimize liabilities, save tax with mutual funds, and grow your wealth steadily over time.

How to Invest in Mutual Funds

Getting started with mutual fund investing is simpler with GCIC Finserv. Contact us now

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Equity, Debt, or Hybrid? How to Choose the Right Mutual Fund for Your Goals

How to Choose the Right Mutual Fund

When it comes to investing, mutual funds offer flexibility, professional management, and a wide range of options. But with so many choices, deciding between equity mutual funds, debt mutual funds, and hybrid mutual funds can feel overwhelming. The right decision depends on your investment goals, risk appetite, and time horizon. Here’s a comprehensive guide to help you with effective mutual fund selection.

Understanding the Three Main Types of Mutual Funds

1. Equity Mutual Funds

Equity mutual funds invest primarily in shares of companies.

  • Who are they for? Investors with long-term goals, such as wealth creation, retirement planning, or funding a child’s education.

  • Pros: Potential for high returns over time, tax benefits if held for over one year, and a hedge against inflation.

  • Cons: Higher risk due to market volatility, making them less suitable for short-term investments.

2. Debt Mutual Funds

Debt mutual funds invest in bonds, government securities, and other fixed-income instruments.

  • Who are they for? Conservative investors seeking stable income, capital preservation, or short-term parking of funds.

  • Pros: Lower risk than equity, predictable returns, and better liquidity compared to fixed deposits.

  • Cons: Returns are generally lower than equities, and they may still face interest rate or credit risk.

3. Hybrid Mutual Funds

Hybrid mutual funds invest in a mix of equity and debt instruments.

  • Who are they for? Investors who want a balanced approach—some growth potential without taking on full equity risk.

  • Pros: Diversification reduces risk, automatic rebalancing between equity and debt, and suitability for medium-term goals.

  • Cons: Returns are moderate, and performance can vary depending on market conditions.

How to Match Funds with Your Investment Goals

When choosing between these funds, align them with your personal investment goals:

  1. Short-Term Goals (up to 3 years):
    Debt mutual funds are more appropriate as they offer safety and predictable income.
    Examples: Building an emergency fund, saving for a vacation, or meeting upcoming expenses.

  2. Medium-Term Goals (3–5 years):
    Hybrid mutual funds strike a balance between growth and stability.
    Examples: Down payment for a house, funding a wedding, or building a safety corpus.

  3. Long-Term Goals (5+ years):
    Equity mutual funds are ideal for wealth creation, as they have the potential to outperform other assets over time.
    Examples: Retirement planning, children’s education, or building a financial legacy.

Key Factors for Effective Mutual Fund Selection

  1. Risk Appetite: Understand whether you are conservative, moderate, or aggressive.

  2. Time Horizon: Longer durations allow you to absorb short-term market fluctuations.

  3. Financial Goals: Be clear about whether you need growth, income, or a mix of both.

  4. Fund Performance & Costs: Look at the track record, expense ratio, and portfolio composition before investing.

  5. Tax Efficiency: Consider how capital gains tax impacts your overall returns.

Final Thoughts

Choosing between equity mutual funds, debt mutual funds, or hybrid mutual funds isn’t about finding the “best” fund in isolation—it’s about finding the right fit for your investment goals. By aligning your choices with your risk tolerance, time horizon, and financial objectives, you can make smarter decisions and stay on track to build long-term wealth.

Successful investing begins with informed mutual fund selection. Take the time to evaluate your needs carefully, and if necessary, consult a financial advisor to craft a plan that works for you.

How to Invest in Mutual Funds

Getting started with mutual fund investing is simpler with GCIC Finserv. Contact us now

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5 Mutual Fund Investors Mistakes (How to Avoid Them)

Mutual Fund Investors Mistakes

When it comes to mutual fund investing, beginners often find themselves overwhelmed by choices, jargon, and market fluctuations. A beginner guide to mutual funds usually explains the basics, but many first-time investors still fall into common traps that can hurt long-term returns. This article highlights the top five mistakes new investors make — and how you can avoid them with smart investing for beginners.

1. Investing Without Understanding What Mutual Funds Are

Many people jump into mutual funds simply because friends or financial influencers recommend them, without asking, “What are mutual funds?” In simple terms, mutual funds pool money from many investors and invest it across a diversified portfolio of stocks, bonds, or other assets.

The Fix: Learn the mutual fund basics first. Take time to read about mutual funds explained in clear language — what they are, how they work, and the risks involved. A little homework helps you make informed decisions.

2. Ignoring the Different Types of Mutual Funds

There are types of mutual funds designed for different goals — equity funds for long-term growth, debt funds for stability, hybrid funds for balance, and index funds for passive investing. Many new investors pick a fund randomly or follow trends, not realizing that each type carries different risk levels and return expectations.

The Fix: Match the fund type with your financial goal and risk appetite. If you are risk-averse, consider balanced or debt funds. If you are young with a long investment horizon, equity funds may suit you better.

3. Trying to Time the Market

First-time investors often try to “buy low and sell high,” making frequent trades to chase quick profits. In reality, even seasoned professionals struggle to time the market accurately. This behavior can lead to losses or missed opportunities.

The Fix: Focus on consistency, not timing. Use systematic investment plans (SIPs) to invest fixed amounts regularly, reducing the impact of market ups and downs. Over time, this disciplined approach leads to more predictable returns.

4. Neglecting Expense Ratios and Other Costs

When learning how to invest in mutual funds, many beginners overlook the fees involved. Every fund has an expense ratio — a small percentage charged annually for management and operations. High fees can eat into your returns over time.

The Fix: Compare funds not just by past performance but also by cost. Look for funds with lower expense ratios that still meet your investment objectives. Even a 1% difference in fees can have a big impact over decades.

5. Investing Without Clear Goals or Time Horizon

Some beginners invest without defining why they are investing — for retirement, buying a home, or building emergency savings. Without a clear goal and time horizon, it’s hard to select the right fund or measure progress.

The Fix: Start by setting specific financial goals. Decide whether your investments are for short-term needs (1–3 years), medium-term goals (3–5 years), or long-term wealth building (10+ years). This helps you pick the right funds and stay on track.

Key Takeaways for New Investors

  • Understand mutual funds for beginners before investing.

  • Choose the right fund type to match your goals and risk profile.

  • Stay disciplined with SIPs instead of timing the market.

  • Watch costs carefully to maximize returns.

  • Invest with purpose by defining clear goals.

How to Invest in Mutual Funds

Getting started with mutual fund investing is simpler than you think. Contact us now

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SIP vs. Lump Sum: Which Mutual Fund Investment Strategy Is Right for You?

SIP vs. Lump Sum

If you’re exploring mutual funds for the first time, you’ve probably come across two popular investment approaches — Systematic Investment Plans (SIPs) and lump sum investments. But which strategy should you choose? This beginner guide to mutual funds will break down the differences, explain the pros and cons of each method, and help you decide the right path for smart investing for beginners.

Understanding SIP and Lump Sum Investments

Systematic Investment Plan (SIP)

  • What it is: You invest a fixed amount regularly — monthly, quarterly, or weekly — into your chosen mutual fund.

  • Best suited for: Salaried individuals or anyone who prefers disciplined, gradual investing.

  • Key benefit: It averages out the purchase cost through rupee cost averaging, reducing the impact of market volatility.

Lump Sum Investment

  • What it is: You invest a large amount of money at once into a mutual fund.

  • Best suited for: Investors who have significant surplus funds, such as a bonus or inheritance.

  • Key benefit: Your entire amount starts compounding immediately, which can be advantageous during a rising market.

SIP vs. Lump Sum: Pros and Cons

Advantages of SIP

  • Encourages financial discipline.

  • Requires no market timing — you invest regardless of ups and downs.

  • Ideal for mutual funds for beginners who want to start small.

Disadvantages of SIP

  • Slower capital deployment — your full amount isn’t invested at once.

  • Less impactful during strong, sustained bull markets.

Advantages of Lump Sum

  • Immediate exposure to market growth potential.

  • Potentially higher returns in bullish trends.

  • Good for short-term goals if market conditions are favorable.

Disadvantages of Lump Sum

  • High risk if market falls soon after investing.

  • Requires careful timing and a strong understanding of mutual fund basics.

How to Decide Which Strategy is Right for You

  1. Consider your income flow:

    • Regular income? SIP is often better.

    • Large windfall? Lump sum could work.

  2. Assess your risk appetite:

    • If you are new to investing and worried about volatility, SIP offers a smoother entry.

    • If you can tolerate short-term fluctuations, a lump sum may provide faster growth.

  3. Review your financial goals:

    • For long-term wealth building (retirement, child’s education), SIPs are reliable.

    • For short-term goals or when markets are at attractive valuations, lump sum investing might make sense.

  4. Look at market conditions:

    • If markets are high and unpredictable, SIPs reduce risk.

    • If markets are undervalued, lump sum investing can maximize gains.

Types of Mutual Funds to Consider

Whether you choose SIP or lump sum, you’ll also need to decide on the types of mutual funds that match your goals:

  • Equity funds: Higher growth potential but more volatile.

  • Debt funds: Lower risk, steady returns.

  • Hybrid funds: Balanced approach, mixing equity and debt.

Knowing mutual fund basics helps you match your risk tolerance to the right fund type.

Final Thoughts

There is no universal answer to SIP vs. lump sum — it depends on your financial situation, market conditions, and risk appetite. For mutual funds for beginners, SIPs offer simplicity, discipline, and peace of mind. More experienced investors with surplus cash may benefit from lump sum investing if timed wisely.

Whether you choose one or combine both strategies, remember that smart investing for beginners starts with understanding your goals and sticking to a plan. Mutual funds are a powerful way to build wealth when approached thoughtfully. 

How to Invest in Mutual Funds

Getting started with mutual fund investing is simpler than you think. Contact us now

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What Are Mutual Funds? A Beginner’s Guide to Smart Investing

Invest in Mutual Funds

If you’ve been hearing about “Invest in Mutual Funds” everywhere but aren’t sure what they really are, you’re not alone. Many new investors want to grow their money but feel overwhelmed by complicated financial jargon. This beginner guide to mutual funds will help you understand the mutual fund basics, the types of mutual funds, and how to invest in mutual funds without feeling lost.

What Are Mutual Funds?

At its core, a mutual fund is a pool of money collected from many investors and managed by a professional fund manager. This pool is then invested in a diversified mix of stocks, bonds, or other securities. The goal is simple: allow everyday investors to participate in markets without having to pick and manage individual investments themselves.

Think of it as joining a group trip rather than planning a solo journey—you share the costs, reduce the risks, and rely on an experienced guide to lead the way. That’s the essence of mutual fund investing.

Why Mutual Funds Are Great for Beginners

Mutual funds for beginners are popular because they offer:

  • Diversification – Your money is spread across multiple investments, reducing risk.
  • Professional management – Experts handle research, buying, and selling on your behalf.
  • Affordability – You can start with relatively small amounts.
  • Flexibility – There are funds to suit every goal, whether it’s saving for retirement, buying a home, or building wealth gradually.

This makes them an ideal tool for smart investing for beginners who want to learn while their money works for them.

Types of Mutual Funds

There are several types of mutual funds, each designed for different risk levels and investment goals:

  1. Equity Funds – Invest primarily in stocks. They aim for higher returns but carry higher risk.
  2. Debt Funds – Focus on bonds and fixed-income securities, offering more stability and lower risk.
  3. Hybrid Funds – Combine equity and debt for a balanced approach.
  4. Index Funds – Track a specific market index, providing broad exposure at low cost.
  5. Sector or Thematic Funds – Target specific industries or trends, suitable for investors with a higher risk appetite.

Understanding these categories is crucial before you decide how to invest in mutual funds.

How to Invest in Mutual Funds

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Rupee hits highest level in August against US dollar on fading tariff risks, GST boost

Rupee hits highest level in August

The Indian rupee strengthened to its highest level this month on Tuesday, buoyed by easing fears of additional US tariffs and expectations that planned GST reforms will spur domestic growth.

The currency rose to as much as 87.2050 per US dollar, compared with 87.35 in the previous session, before settling at 87.2250. Analysts attributed the gains to renewed optimism following the Trump-Putin meeting and upcoming US-Ukraine talks, which Nomura said may reduce the likelihood of new sanctions or tariffs on India over its Russian oil purchases.

Prime Minister Narendra Modi’s proposed GST rationalisation is also lifting sentiment, with economists saying the measures could boost consumption and offset pressure from weak external demand.

While the rupee advanced, most Asian currencies slipped as US Treasury yields climbed, with the 10-year yield hitting a two-week high on Monday.

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Apple leases 2.7 lakh sqft office in Bengaluru in ₹1,000-crore deal

Apple leases 2.7 lakh sqft office in Bengaluru

US tech giant Apple has signed a 10-year lease for 2.7 lakh sq ft of premium office space at Embassy Zenith on Sankey Road, Vasanth Nagar, Bengaluru, in one of the city’s largest single-tenant real estate deals. The total rental outlay exceeds ₹1,000 crore, according to Propstack lease documents.

Apple has taken the 5th to 13th floors of the property at a monthly rent of ₹6.31 crore, with the agreement commencing on April 3, 2025, and registered in July. The facility, expected to accommodate over 1,200 employees, has a carpet area of 1.96 lakh sq ft and a chargeable area of 2.69 lakh sq ft. The company has paid a ₹31.57-crore security deposit, ₹1.5 crore in stamp duty, and agreed to a 4.5% annual rent escalation. The property is owned by Mac Charles (India) Ltd, part of the Embassy Group.

This is Apple’s second major office in Bengaluru. In 2021, it leased 1.16 lakh sq ft at Prestige Minsk Square on Cubbon Road for ₹2.43 crore per month, with operations beginning in 2023. The company is also eyeing further expansion within Embassy Zenith.

Apple’s retail footprint is expanding as well. It has leased 8,000 sq ft at Phoenix Mall of Asia in north Bengaluru for its third India store, at an annual rent of ₹2.09 crore. The 10-year lease, signed in November 2024, will take effect from August 2025. Additional space has been secured at Oberoi Sky City Mall in Borivali, Mumbai (12,600 sq ft) and in Batrayanpura, Bengaluru (8,000 sq ft).

The expansion underscores Apple’s growing commitment to India, now a key manufacturing hub for the iPhone. On its Q3 FY25 earnings call, CEO Tim Cook expressed excitement over upcoming store launches and highlighted that most iPhones sold in the US are now made in India. Meanwhile, Foxconn, Apple’s key partner, has started producing the iPhone 17 at its new Devanahalli facility near Bengaluru.

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Bajaj Finance, Axis Bank, HDFC Bank Rally Up to 6% on S&P Upgrade and GST Reform Hopes

GST Reform

Mumbai, Aug. 18 — Shares of leading banks and non-banking financial companies (NBFCs) surged as much as 6% in early trade Monday, lifting key market indices after a credit ratings boost by S&P Global and optimism over upcoming Goods and Services Tax (GST) reforms.

At 10:10 a.m., the Nifty Bank index climbed over 1.3% to around 56,035, while the Nifty Financial Services index gained nearly 2% to trade near 26,810. Bajaj Finance, Axis Bank, and HDFC Bank were among the top gainers, supported by strong buying across the financial sector.

S&P Upgrade Lifts Sentiment

S&P Global on Aug. 15 upgraded its long-term issuer credit ratings for seven major Indian banks — including SBI, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India, and Indian Bank — and three finance companies: Bajaj Finance, Tata Capital, and L&T Finance. The rating agency cited India’s robust economic momentum, improved asset quality, and strong profitability outlook for the financial sector.

“We expect India’s banks to maintain adequate asset quality, good profitability, and enhanced capitalization over the next 12-24 months despite some pockets of stress,” S&P said, adding that overall credit risk has declined. The move comes just a day after S&P upgraded India’s sovereign credit rating, providing a further boost to investor sentiment.

Motilal Oswal Financial Services noted that the upgrade could reduce borrowing costs for Indian financial firms accessing overseas markets. Companies such as Bajaj Finance could see a 15–20 basis point reduction in external commercial borrowing rates, while stronger foreign portfolio investment flows may support the rupee and bond yields.

GST Reform Expectations Add Fuel

Investor enthusiasm was also buoyed by Prime Minister Narendra Modi’s Independence Day hint at a new round of GST reforms, potentially to be unveiled around Diwali. The government is reportedly considering a simplified two-slab tax structure — “standard” and “merit” — with special rates limited to a few items.

Analysts believe such reforms could lower the tax burden on consumers purchasing electronics and other durables, spurring demand. This is expected to benefit NBFCs like Bajaj Finance, which finance retail purchases through affordable EMIs.

The dual tailwinds of a global rating upgrade and anticipated tax reforms have positioned India’s financial stocks for continued momentum, analysts say, as foreign and domestic investors alike increase exposure to the sector.

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Trump Signals New Tariffs on Steel and Semiconductor Imports

Trump Signals New Tariffs

Washington, Aug. 15 — U.S. President Donald Trump said Friday he plans to impose tariffs on steel and semiconductor chip imports in the coming weeks, continuing his push to boost domestic manufacturing.

“I’ll be setting tariffs next week and the week after on steel and on, I would say, chips,” Trump told reporters aboard Air Force One en route to Alaska for a meeting with Russian President Vladimir Putin. He said the duties would start at lower rates to give companies time to ramp up U.S. production before increasing sharply later — a phased approach he has also proposed for pharmaceutical imports.

“I’m going to have a rate that is going to be lower at the beginning — that gives them a chance to come in and build — and very high after a certain period of time,” Trump said, adding that he expects companies will choose to manufacture in the U.S. rather than face steep tariffs.

Trump has reshaped global trade policy with sweeping duties on imports from nearly all countries, targeting industries including automotive and metals. In February, he raised tariffs on steel and aluminum to 25%, later doubling them to 50% in May to encourage domestic production. It remains unclear if the upcoming announcement will include further hikes on those metals.

Last week, Trump said semiconductor imports would face a 100% tariff unless companies committed to building manufacturing facilities in the United States. His latest comments came alongside news that Apple would invest an additional $100 billion in domestic operations.

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