Trump intends to implement a 25% customs duty on goods from India
In a significant move, the United States has announced a 25% tariff on Indian exports to the United States, effective from August 1. This decision comes amidst ongoing trade disputes between the two nations, with both parties failing to reach a mutually beneficial trade deal [1].
The US trade deficit with India was a staggering $45.7 billion (€39.8 billion) last year, with the US importing more goods from India than it exports to the South Asian country. This trade imbalance has been a point of contention for the Trump administration, which has accused India of practicing "unfair" trade [2].
In response to the US tariffs, the Indian government has stated that it will take all necessary steps to secure its national interest. India's special trade status with the US, which was revoked by Trump in 2019, has also been a source of tension [3].
The tariffs on Indian exports to the US are separate from the reciprocal tariffs announced by Trump in April. Moreover, the tariffs are not mentioned to have been postponed for negotiations, unlike the higher tariffs for US-China trade [4].
One of the main reasons behind the US criticism of India is its ongoing purchases of Russian oil. Trump has accused India of indirectly financing Russia’s war in Ukraine through these imports [1][4]. In response, his administration has imposed secondary penalties on India’s Russian oil imports. This has been perceived in New Delhi as undue interference in India's sovereign decisions [1][2].
Trump's approach is guided by his "America First" agenda, focusing on trade deficits, reshoring industry, and trade protections for US companies. This clashes with India's "Make in India" policies and its strategic partnerships [1][2].
India has traditionally bought a vast majority of its military equipment from Russia, and it has not joined in on the punitive economic measures against Russia due to its invasion of Ukraine. This has further exacerbated tensions between the two nations [5].
The Indian government is committed to a "fair, balanced" trade agreement. However, the impact of the tariffs on US-India trade remains to be seen. Many economists argue that the tariffs will be passed on to the American consumer and could hurt US economic activity [6].
On a separate note, Trump has reached trade framework agreements with Japan, the Philippines, Indonesia, and the EU. He has also set a 10-day deadline for Russia to achieve a ceasefire deal with Ukraine, or else Moscow will face secondary sanctions [7].
References:
- The Economic Times
- The Hindu
- CNBC
- Bloomberg
- Al Jazeera
- The Washington Post
- Reuters
- The ongoing trade disputes between the United States and India, as well as the conflict over American-Indian trade deals, are significant topics in the world of politics and general news, particularly in Asia.
- India's strategic partnerships and the "Make in India" policies, which focus on domestic manufacturing, clash with Trump's "America First" agenda, which emphasizes trade deficits, reshoring industry, and trade protections for American companies.
- The Indian government is taking firm steps to protect its national interest in response to the newly implemented 25% tariff on Indian exports to the United States, a decision that could potentially affect the world trade landscape and have repercussions in the realm of international politics.
