Donald Trump Backs Reciprocal Tariffs Just Before Meeting With PM Modi.
Washington: Just hours before meeting Indian Prime Minister Narendra Modi, former U.S. President Donald Trump announced the implementation of “reciprocal tariffs” on countries imposing high tariffs on American goods. Trump directly criticized India and said,”India is the most tariff country, followed by almost all other countries.
During the signing ceremony in the White House,Trump highlighted his view on trade fairness while delivering a speech. “We will charge them no more, no less. They assess the U.S. tax or tariff, and we will assess them the amount of the tax and tariff—pure and simple,” he said.
A New Trade Strategy
Trump’s trade policy has been often confrontational, seeking to impose costs on its adversaries and its partners, too. During the announcement, he remarked that U.S. allies sometimes impose worse trade restrictions than its competitors. The current tariffs will be applied specifically to each trade partner and the tariff level will be considered along with value-added tax (VAT) and other non-tariff trade barriers.
Trump’s trade adviser Peter Navarro echoed the tone, by complaining about the punitive tariffs and more punitive non-tariff barriers being imposed by the exporting nations, and he drew special attention to how the European Union is increasing the VAT rate on American products.
White House officials disclosed that initially, the US will gauge whether countries have considerable trade deficits and/or are involved in such trade practices that Trump sees as unacceptable. Reviewing is estimated to take some weeks or couple of months at most.
Impact on Prices and Trade Deficit
Trump acknowledged that the new tariffs might temporarily raise prices in the U.S. but expressed confidence that they would eventually stabilize. His administration has consistently used tariffs as a tool to influence trade policies and negotiations.
Trump had already begun to impose a wide range of tariffs as soon as assuming office, including on important U.S. trading partners (e.g., China, Canada, and the European Union). His government claimed such actions were necessary to respond to unfair trade practices and safeguard the American industry.
Understanding Reciprocal Tariffs
if a country imposes tariffs on American goods, the U.S. will impose equivalent tariffs in return. Trump referred to this policy with the statement, “Very obviously, if they want to get us back, we get them back.
Press secretary Karoline Leavitt echoed this view, describing the policy as “straightforward logic” and as one in which the Trump administration was unwavering in pursuit of trade fairness.
The recently announced reciprocated tariffs will supplement a 10% blanket tariff which has been in place for the past week. Besides, the United States has already applied high strict 25% on steel and aluminum imports, mostly directed at China.
How Will India Be Affected?
India, which has one of the highest tariff rates on US goods, is likely to be heavily affected by the new policy. Trump’s statements suggest that in the absence of an agreement, India may be subjected to new tariffs when Modi arrives.
Tariffs have been central features of the Trump’s overall economic strategy, in an effort to generate revenue to pay for tax reductions and other policy initiatives. Since the tremendous trade turnover between the two countries (US exported 87 billion to the US in 2024), any tariff changes would have serious economic repercussions.
Who Else Could Be Affected?
Reports indicate that reciprocal tariffs may also extend to an emergng economies, such as Thailand, which have moderate tariff levels for goods originating from the United States. However, countries with established trade agreements with Washington, such as South Korea, are expected to face fewer risks.
Analysts believe that these new tariffs could lead to trade disputes and negotiations, as affected nations might retaliate with their own countermeasures. The wider effect of the policy, however, is to be determined, particularly as global economies are still attempting to recover from the post-pandemic shock.
What’s Next?
Discussions on trade will be one of the major focus in the meeting of PM Modi and Washington D.C.pro. Whether the leaders can reach a compromise remains uncertain. But there is no doubt that now Trump’s trade policies not only continue to change global economic landscapes, but also to lead countries to reexamine their tariff scheme.
With the eyes of the world on them, the success of the Trump-Modi meeting might lead to the future path of U.S.-India trade ties.
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