Rama Krishna Sangem
Bonhomie between India and the US has suffered a jolt. India’s hopes of reduced tariffs on exports to the United States were dashed on July 30 Wednesday after US President Donald Trump announced a 25 per cent levy, plus an unspecified penalty for buying arms and crude oil from Russia. “Thank you for your attention to this matter,” Mr Trump said on Truth Social.
Since returning for his second term on January 20, Donald Trump has slapped tariffs on all of the United States’ major (and many of the minor) trading partners, arguing they had been charging as high or higher levies on the import of American goods. He has argued doing so will either force trading partners to lower tariffs and open markets to US-made goods, or increase tax revenue for Washington.
Trump has reserved special ‘praise’ for India on this subject; while campaigning last year he called India – which charges an average of 17 per cent tariffs on American goods – a “very big abuser” and today he complained of “far too high tariffs… among the highest in the world”.
Between his tariff “abuser” rants in December and this morning, there have been several twists and turns, including the prickly issue of a trade deal between the two countries.
Talks over an India-US trade deal actually began before Mr Trump was sworn in; on January 12 trade officials met in Delhi, but Commerce Minister Piyush Goyal played down expectations. In February Prime Minister Narendra Modi travelled to the US to meet Mr Trump.
Modi’s visit to White House gone waste
The idea was to pre-empt trade action against India; the visit came after the American leader had already brow-beaten other nations with his ‘tariffs stick’, including announcing a 25 per cent levy on all steel and aluminium imports. India said this would not affect its industries too much.
The two met on February 14. But, hours earlier, Trump repeated his complaint and announced reciprocal tariffs on all nations – India would be given a ‘discount’ – that impose taxes on US exports. So far, 50 rounds of talks were held between the officials of the two countries and at least half a dozen draft deal were prepared since April second week. But each of the drafts were rejected by Trump as he was not satisfied with the rate of tariffs on India.
He developed a sense of dislike for India for two reasons: One, he thinks India has huge tariff walls ls against American goods. Two he doesnot like India buying weapons and oil from Russia. In the early days of his presidency, Trump thought Putin would listen to him and stop the war on Ukraine, but over the months, he realised that the best way to rein in Russia is to squeeze its exports, mainly oil and weapons. So, India is an obvious target of his tariffs and penalties.
