Donald Trump targets India on trade second time this week. Should New Delhi worry?
US president Donald Trump took yet another shot at India on ongoing trade differences and accused it Saturday of charging “over 100%” import duty on certain American goods.
This was his second such attack on India in one week, marking a new escalation that should worry New Delhi, which is trying to prevent the Trump administration from terminating benefits accruing to India from a duty-free tariff programme under which India exported $5.6 billion worth of goods to the US in 2017.
In a speech to the Republican Jewish Coalition on Saturday, President rolled out by now his well-known list of trade issues, such as trade deficit and high tariffs, which could be, he said, “100% … 200%, 250%, 300% and we charge them nothing”.
“We have a case where a certain country,” he said, and added, after a dramatic pause, to laughter, “India.”
It is “charging us”, he resumed, but switched mid-sentence, as he does often, to another idea. “A great country, great friend Prime Minister Modi.”
It is “charging us,” he said, returning to the original idea, “over a 100% for many things (and) we’re charging them nothing for similar or the same product.” The existence or the number of such duties, of more than 100%, could not be immediately ascertained.
The president suggested the United States should be “charging them something”, because this is not about “free trade”, it’s “stupid trade”.
The American president has threatened to hit India with reciprocal taxes before, specially on motorcycles. He has complained about India levying 100% tariff on Harley-Davidson motorcycles imported from the United States, whereas the United States charges nothing on motorcycles it imports from India.
India has since cut duty on these motorcycle imports to 50%. But Trump continues to use the 100% figure as he did past Tuesday, April 2, when he also called India “one of the highest taxing nations in the world”.
“They charge us 100% tariff on goods. So they send a motorcycle--and they make a lot of them- Indian cycles,” Trump said at the annual spring dinner of the National Republican Congressional Committee.
He continued: “They send them to our country, we charge them nothing. We send a Harley Davidson to India and they charge us 100%. Not fair, okay. Not reciprocal. It’s not fair.”
President Trump’s trade rhetoric has often been followed by actions. He slapped India with 25% tariff on steel and 10% on aluminum along with other countries, and did not grant it a waiver as he did with others. And this past March, he informed US congress his intention to terminate India’s eligibility to continuing benefitting from the duty-free Generalized System of Preferences scheme. It will take effect early May, at the end of the mandatory 60-day notice period if India was unable to stop it, and the only way it can is to yield to US demands to grant market access to US-made medical devices and dairy products.
Failure to prevent the termination would subject GSP-covered Indian goods to usual import duties, which, in India’s estimation, could add up to $190 million annually. Not a big amount, but there are fears US buyers of these goods could shift to other GSP-covered suppliers to keep their costs down.