Key Takeaways
- The US has imposed tariffs on foreign imports, with the goal of protecting American industries and jobs.
- India is being targeted by the US due to its high tariffs on American goods, including auto tariffs higher than 100 percent.
- The US’ tariff policy could have a significant impact on India’s trade surplus with the US, which has doubled to $35 billion over the last decade.
Washington/New Delhi: In a key speech addressing a joint session of the Congress, US President Donald Trump defended his harsh tariff policy and made a pointed reference to India along with other countries including China for charging high tariffs, terming it “very unfair”.
The US President also highlighted his administration’s commitment to enforcing reciprocal tariffs on foreign imports.
Singling out India during the speech, Trump said, “India charges us auto tariffs higher than 100 percent.”
“If you don’t make your product in America under the Trump administration, you will pay a tariff, and in some cases, a rather large one. Other countries have used tariffs against us for decades and now it’s our turn to start using them against those other countries,” Trump said during his address.
Mentioning the countries that charge the US “tremendous” amounts of tariffs he said: “On average, the European Union, China, Brazil, India, Mexico and Canada …have you heard of them? And countless other nations charge us tremendously high tariffs than we charge them,” Trump said.
“It’s very unfair,” he added.
“China’s average tariff on our products is twice what we charge them and South Korea’s average tariff is four times higher,” he further said.
On April 2nd, reciprocal tariffs will kick in, with the US imposing tariffs on countries that charge high tariffs on American goods, including India.
“On April 2nd, I wanted to make it April 1st but didn’t want it to be accused of April Fools day… it’s a lot of money…April 2nd reciprocal tariffs kick in, whatever they tariff us, we will tariff them, a reciprocal back and forth… if they do non-monetary tariffs to keep us out of their market, we will do non-monetary barriers to keep them out of our market,” Trump said.
During their meeting in the White House last month, President Trump had made it clear to Prime Minister Modi that India will not be spared from the US’ reciprocal tariffs.
On Tuesday, the Trump administration announced 25 percent tariffs on its neighbouring countries and on Canada and Mexico. The US also doubled tariffs on Chinese goods from 10 percent to 20 percent on Tuesday, citing lack of action from China on its alleged role in fentanyl production.
India has a growing trade surplus with the US. Over the last decade, India’s goods trade surplus with the US has doubled to $35 billion, driven by strong exports in electronics, pharma, and textiles, all of which could now be vulnerable to reciprocal tariff measures.
India’s imports from the US include petroleum crude, pearls, precious stones, electrical machinery, aircraft parts, and military equipment. Exports to the US primarily consist of petroleum products, pharmaceuticals, telecom instruments, and electronic components. The trade in defence equipment is growing steadily.
Earlier, Trump had threatened to impose 100 per cent tariffs on BRICS nations, including India, if they undermine the US dollar. He warned that any attempt by BRICS nations to create a rival currency would lead to such tariffs. This aggressive stance reflects the US’ policy of continuing to assert the dominance of the US dollar.
