'We are getting ready to do it': US President vows 'fair' trade policies, says India 'will not be spared'

Donald Trump has long been vocal about what he considers unfair trade practices by countries like India and China. During the recent swearing-in of Commerce Secretary Howard Lutnick, he doubled down on his commitment to implementing reciprocal tariffs, meaning the US will charge the same amount that other countries impose on American goods.

Modi Trump trade clash

"We'll soon impose reciprocal tariffs because that means, they charge us, we charge them. It’s very simple," Trump stated. "Whatever a company or a country such as India or China charges us, we charge them back. We haven’t done that before, but we are getting ready to do it." This is not the first time Trump has called out India’s trade policies. He has repeatedly claimed that India has one of the highest tariff rates in the world and has described the country as a "very big abuser" of trade rules.

Trump recalled a discussion with Prime Minister Narendra Modi, where he insisted that the US would adopt a tit-for-tat tariff structure. He claimed that Modi disagreed with his proposal, but Trump stood firm: "Whatever you charge, I’m going to charge." He reiterated that "nobody can argue with me" on this trade policy.

US India trade tensions

Trump has long criticized India’s tariff policies, calling them some of the highest in the world. Even before the last US presidential elections, he labeled India a "big abuser" of trade and vowed to correct the imbalance. His latest comments suggest that if he regains power, he will prioritize aggressive trade policies against India and China. "I told him, 'Here’s what we’re going to do, reciprocal. Whatever you charge, I'm charging,"  Trump said, adding that Modi “did not like the idea." However, he asserted that his decision is final, stating, " Nobody can argue with me on this" 

This exchange highlights the ongoing trade friction between the US and India, especially under Trump’s leadership. During his previous tenure, the Trump administration revoked India’s preferential trade status under the Generalized System of Preferences (GSP), citing market access concerns. If he returns to power, a renewed push for reciprocal tariffs could further escalate trade tensions. Trump’s latest remarks come amid long-standing trade disagreements between Washington and New Delhi. India has historically maintained high import tariffs on several American goods, including automobiles, agricultural products, and medical devices.

Some key points of contention between the US and India include:

• High Indian tariffs on American goods: Trump has frequently cited the 50% tariff India imposes on Harley-Davidson motorcycles, which he has used as an example of trade imbalance.
• US restrictions on Indian exports: The Trump administration previously ended India’s GSP trade benefits, which had allowed certain Indian goods to enter the US duty-free.
• Agricultural and technology disputes: The two nations have clashed over market access in sectors like agriculture, digital trade, and e-commerce regulations.
• While the Biden administration has taken a more diplomatic approach, Trump's return to power could see a revival of aggressive trade measures against India.

What's next? Trade war or negotiation?

With Trump pushing for hardline trade policies, experts predict new challenges for US-India trade relations. While reciprocal tariffs may protect American businesses, they could also trigger retaliatory actions from India, potentially leading to a trade war between the two nations.

Potential outcomes:

1. Stronger Tariff Policies: If Trump follows through on his reciprocal tariffs, India might increase tariffs on US goods in retaliation.
2. Bilateral Trade Talks: Modi’s government could seek diplomatic negotiations to prevent further trade restrictions.
3. Shifts in Global Trade Alliances: If US-India trade tensions escalate, India could diversify its trade partnerships and strengthen economic ties with other nations like Russia and the EU.
4. As Trump gears up for a possible return to the White House, his stance on tariffs could reshape global trade policies, with India at the center of this economic battleground. For now, all eyes are on how New Delhi will respond to Trump’s bold trade threats.