It seems that Trump is threatening India
by retaliating trade tariffs. On Thursday US President Donald Trump
threatened India and China. These two countries are the middling
American trade partner and trump will soon going to reciprocate trade
tariffs if they the taxing American imports were not eased.
Trump stated that “We’re going to be doing a reciprocal tax programme,” Trump
said at a White House event where he simplified the tariff issue for
his working class base. ”They are 50, they are 75 or they are 25, we are
going to be doing the same numbers. It’s called reciprocal. It’s a mirror of tags. So they charge us 50, we would charge them 50.”
Major Trade between India and US
New Delhi is the tenth largest trading
partner of Washington’s. India’s top imports from US in 2016 were
precious metal and diamonds ($7.0 billion) followed by machinery ($2.0
billion), optical and medical instruments ($1.3 billion), mineral fuels
($1.2 billion), and electrical machinery ($1.2 billion).
Moreover, India also exports $ 11 billion
worth of the same to US. By reducing the tariff on significant items
largely benefit Indian consumers even as it helps US exports to India.
On the other side the largest US import
from India is pharmaceuticals ($7.4 billion in 2016) and a Trump tariff
on this will simply make generic medicines more expensive for Americans.
It is to be noticed that the drugs imported from U.S are already
expensive for Indians.
India remains unaffected
It seems that India
is not going to be affected much by the tariffs. Thus it is might
possible that major exporting countries which are facing tariff barriers
in the US are likely to divert their goods to India. As India being a
large consumer market.
A retaliatory Trump tariff on the $ 2.1
billion of agricultural produce US imports from India (including spices
($279 million), rice ($158 million), tree nuts ($157 million), essential
oils ($151 million), and processed fruit & vegetables ($114
million)), won’t kill US consumers or Indian exporters. Basmati rice in
US stores is, for instance, cheaper than in India.
Trade war may arise
Trump also weakens his own pledge by
carving out tariff exceptions for Canada and Mexico. These are the third
and fourth largest US trading partners. The most affected are European
Union and China, which are the top two US trading partners. They have
also threatened for retaliation if Trump goes forward with tariffs. It
is quite possible that it may lead to trade and all over rise in prices.
A retaliatory Trump tariff on the $ 2.1
billion of agricultural produce US imports from India. This includes
rice ($158 million), spices ($279 million), essential oils ($151
million), tree nuts ($157 million) and processed fruit & vegetables
($114 million)). This will not going to affect US consumers or Indian
exporters. For instance, Basmati rice in US stores is cheaper as
compared to India.
Highlights:
- Donald trump is going to make reciprocal tax programme.
- India will be largely unaffected by the tariffs.
- However, the major exporting countries which are facing tariff barriers in the US might turn away their goods to India’s. As India has one of the largest consumer markets.
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