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Donald Trump threatens India with reciprocal trade tariffs

Jyotirmay Kaushal by Jyotirmay Kaushal
December 18, 2024
in Americas
Donald Trump threatens India with reciprocal trade tariffs
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The United States President-elect Donald Trump has once again threatened to impose retaliatory taxes on countries like India and Brazil as “reciprocation” of “high tariff” imposed by them on import of certain American products. Donald Trump has consistently asserted that he will push high tariffs on a number of countries. The Republican leader believes the move to put tariffs on nations is a way for the American companies to get a reciprocal access in those regions.

Speaking to reporters on December 16, Trump said, “Reciprocal. If they tax us, we tax them the same amount. They tax us. We tax them. And they tax us. Almost in all cases, they’re taxing us, and we haven’t been taxing them.” When asked about a potential trade agreement with China, Trump particularly named India and Brazil being among the countries that impose high tariffs on certain US products and stated plans to retaliate.

“The word reciprocal is important because if somebody charges us — India, we don’t have to talk about our own — if India charges us 100 per cent, do we charge them nothing for the same? You know, they send in a bicycle and we send them a bicycle. They charge us 100 and 200. India charges a lot. Brazil charges a lot. If they want to charge us, that’s fine, but we’re going to charge them the same thing,” Trump said.

The American billionaire has had a mixed relationship with India. On one hand the strategic ties between the two countries has flourished however the trade partnership has faced significant hurdles. In 2019, India imposed retaliatory tariffs on several U.S. products after the US increased duties on steel and aluminum imports. Trump responded by withdrawing India’s preferential trade treatment under the Generalized System of Preferences (GSP), a move that impacted India’s exports to the US.

Trump has always sought to maintain a reciprocal relationship with countries, in his previous term as President he had reiterated this stand. In 2019, India imposed retaliatory tariffs on several U.S. products after the US increased duties on steel and aluminum imports. Trump responded by withdrawing India’s preferential trade treatment under the Generalized System of Preferences (GSP), a move that impacted India’s exports to the US.

India’s import and export relationship with the US is substantial. In 2023-24, imports from the US stood at $42.2 billion, while exports to the US reached $77.52 billion, making America India’s largest export destination. Trump will surely be looking to put some strong deterrence on Indian companies.

The one advantage India might have is that the new look Trump regime is expected to begin a trade war with China, this will generate a massive void in the American market that can be filled by Indian companies. Trump has always maintained an extremely tough stance towards China who he believes is severely damaging American business interests.

 

 

Tags: ChinaDonald TrumpElon MuskIndiaModiUSA
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Jyotirmay Kaushal

Jyotirmay Kaushal

Dreaming of a reality that is a dream. A scribbler in the current incarnation with an avid interest in global affairs.

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