Trump Announces Reciprocal Tariffs on India Amidst Trade Tensions
President Trump has announced a 26% reciprocal tariff on Indian imports, criticizing India’s high tariffs during a speech at the White House. Although he labeled Modi as a “great friend,” he emphasized the unfairness of the existing trade dynamics. The imposition of tariffs is set to adversely impact India’s agricultural and pharmaceutical exports, even as negotiations for a Bilateral Trade Agreement progress.
On Thursday, United States President Donald Trump announced a 26% reciprocal tariff on imports from India, referring to it as “discounted” and “kind.” Trump emphasized that he considers Prime Minister Narendra Modi a “great friend”; however, he criticized India’s high import duties, which he stated stand at 52% for U.S. products, thereby declaring, “You’re not treating us right.”
The new tariffs will be imposed from April 9, alongside a 10% universal tariff taking effect on April 5. The decision has raised concerns regarding the potential adverse effects on India’s agricultural and pharmaceutical exports to the United States. Sectors such as steel and aluminium are already facing a 25% tariff, which further complicates trade relations.
From 2021-22 to 2023-24, the United States has held the position of being India’s largest trading partner, accounting for approximately 18% of India’s total goods exports. Reports from SBI Research forecast a possible 3-3.5% decrease in exports as a result of U.S. tariffs. Trump’s decision to apply these tariffs came just before his meeting with Modi, highlighting ongoing tensions in their trade discussions.
Despite these tariffs, progress towards a Bilateral Trade Agreement (BTA) has been made, as both nations have agreed on terms of reference recently. In an effort to ease tensions, the Modi government is contemplating reducing import duties on specific U.S. items, including Harley-Davidson motorcycles and Californian wine, with a proposal to lower duties on Harley-Davidson bikes from 50% to 40%.
In summary, President Trump’s announcement of a 26% reciprocal tariff on Indian imports underscores the complexities of U.S.-India trade relations. While acknowledging Prime Minister Modi as a friend, Trump reiterated his concerns over high Indian tariffs. This decision will likely affect various sectors in India, even as discussions on a Bilateral Trade Agreement continue. The Modi government’s potential duty reductions on specific U.S. products may serve as a strategic response to these tariffs.
Original Source: www.indiatoday.in
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