In the first round of tariffs announced on Friday, US President Donald Trump did not mention India. He cited a “high trade deficit” and imposed 25% tariffs on Canada and Mexico and 10% on China.
The new policies, which got into effect on February 1, target the nations that contribute most to the US trade deficit.
The Indian Express report stated, China, Mexico, and Canada are the main causes of the US trade deficit, accounting for 30.2%, 19.2% and 14% of the total. India is the ninth-largest contributor, with only 3.2%, according to the Research and Information System (RIS).
During a press briefing, Trump stated, “We have big deficits with all three of them. And in one case, they’re sending massive amounts of fentanyl, killing hundreds of thousands of people a year with fentanyl. And in the other two cases, they’re making it possible for this poison to get in. We have about a $200 billion trade deficit with Mexico”.
According to the Economic Survey published on Friday, India’s import tariff policy has advanced over time, successfully striking a balance between domestic goals and the necessity of global economic integration.
The survey stated, “Tariffs vary by sector, with considerations such as protecting sensitive sectors from foreign competition and permitting access to important raw materials and intermediate goods. India has ensured that tariff policies comply with WTO rules and regulations. Overtime, several efforts have been made to rationalize tariffs further and address the inverted duty structures”.
In its report on January 17, China would lose $128 billion and the US would lose $55 billion over four years if the US placed a 10 percent tax on China and China retaliated, according to the Peterson Institute for International Economics.
The report said, “Inflation would increase by 20 basis points in the US, and after an initial dip, by 30 basis points in China. The initial fall in inflation in China is caused by a temporary tightening of Chinese monetary policy aimed at offsetting the depreciation of the Chinese currency”.
The report added, BVR Subrahmanyam, the CEO of NITI Aayog, stated in December that significant trade diversions in international commerce might propel India’s economy to a possible boom as a result of US President-elect Donald Trump’s trade policies.
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