Donald Trump Calls India a 'Very High Tariff Nation,' Warns of Reciprocal Tariffs

While signing executive orders at the Oval Office on Thursday (local time), US President Donald Trump once again criticized India's trade policies, calling it a "very high tariff nation." He reiterated that reciprocal tariffs would be imposed on countries that levy duties on American goods, with these measures set to take effect on April 2.

This marks the second instance of Trump highlighting India's trade tariffs. Previously, he referred to India as the "tariff king." Addressing the US Congress earlier in the week, he cited tariff imbalances with countries such as India and China. “India imposes auto tariffs exceeding 100 per cent, while China's average tariff on our goods is double what we charge them,” Trump remarked, labeling these disparities as “unfair.” This can potentially affect automobile sector stocks in India as well. 

While signing the executive orders, Trump stated that the current tariffs are “temporary and small,” but emphasized that the primary tariffs would be reciprocal, taking effect on April 2. He underscored the importance of ensuring fairness in trade deals, stating that the US has long been at a disadvantage due to the high tariffs imposed by other nations.

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Trump’s View on Reciprocal Tariffs

Defining what he considers a high-tariff nation, Trump said, “Canada is a high tariff nation. They impose a 250 per cent tariff on our dairy products and other goods, along with significant tariffs on lumber. But we don’t need their lumber—we have more than enough of our own.”

According to media reports, Trump defended the introduction of reciprocal tariffs by stating, “We’ve been taken advantage of by every country in the world. They charge us 150–200 per cent, while we impose little to nothing in return. Now, whatever they charge us, we will charge them the same. There will be no exceptions. I’ve been looking forward to April 2 for a long time, and it will be a significant day.”

Trump also emphasized that the new tariffs would encourage fair competition, compelling countries like India and China to reconsider their trade policies with the US. He pointed out that the American economy has suffered due to long-standing trade imbalances and stressed the need for reforms that protect domestic industries.

Trump-Modi Meeting at the White House

During a meeting with Indian Prime Minister Narendra Modi at the White House last month, Trump asserted that the US trade deficit with India is nearly $100 billion. He added that both leaders had agreed to initiate negotiations to resolve long-standing trade imbalances. “These issues should have been addressed over the past four years, but they weren’t. Our objective is to finalize an agreement,” Trump stated. Speaking at a joint press conference with PM Modi, he reiterated that India has maintained strong tariff policies.

Trump also noted that while the US and India have strong diplomatic and strategic ties, trade remains a point of contention. He expressed optimism about resolving the disparities through negotiations but maintained that the US would not hesitate to impose tariffs if necessary. He emphasized that fair trade would be the cornerstone of future agreements between the two nations.

Experts believe that Trump's aggressive trade policies could lead to increased tensions between the US and India, potentially impacting bilateral trade. However, officials from both countries have expressed willingness to continue discussions to ensure mutually beneficial trade relations.

With the April 2 deadline approaching, businesses and economists will be closely monitoring the potential impact of these reciprocal tariffs on global trade and the US economy.