How Will India Respond to Looming Reciprocal Tariffs? Trump Promises a ‘Nicer’ Approach as April 2 Deadline Nears
In a significant policy move, former US President Donald Trump declared his intention to implement reciprocal tariffs on all nations, challenging earlier predictions that such measures might target only 10 to 15 countries. “You’d start with all countries, so let’s see what happens,” Trump remarked to reporters aboard Air Force One, refuting claims about limiting tariffs to select nations. He expressed an aim to impose tariffs “much nicer than they were to us,” highlighting the substantial financial gains anticipated for the US economy.
This tariff strategy, set to be unveiled on April 2, is a central component of Trump’s plan to recalibrate global trade dynamics, bolster US manufacturing, and leverage tariff revenues to support domestic policy initiatives, including proposed tax cuts. Kevin Hassett, an economic adviser to the White House, hinted on Fox Business that the tariff focus would initially be on nations with sizable trade imbalances, yet specifics remain undisclosed.
Amid this backdrop, concerns about potential global economic disruption have surfaced. UK Home Secretary Yvette Cooper, in an interview with Sky News, warned against the adverse impacts of heightened trade barriers, which could harm the global economy. Meanwhile, Trump views these tariffs as a protective measure for the US economy and a negotiation tool for better trade deals. However, global markets have exhibited signs of instability, fearing a possible trade war could heighten the risk of a US economic downturn.
The US administration has not finalized which tariffs will be imposed or how they will be calculated, leaving many countries uncertain about how to qualify for exemptions. Trump’s tariffs aim to match the duties levied on US exports, addressing both tariff and non-tariff barriers in international trade. In February, a memorandum was signed, instructing US trade officials to devise tailored countermeasures for each target country.
In simultaneous developments, India and the US are preparing for in-depth trade discussions under a proposed bilateral trade agreement (BTA), as announced by India’s Commerce Ministry. These virtual sectoral talks aim to pave the way for deeper cooperation on market access and trade barriers, with hopes to finalize the first phase by fall 2025. The goal is to more than double bilateral trade to USD 500 billion by 2030 from the current USD 190 billion.
The US is seeking duty concessions in sectors such as industrial goods, automobiles, and agriculture. India, on the other hand, is likely to advocate for lower tariffs on textiles and labor-intensive products. Despite American pressures, experts suggest India may avoid including sensitive sectors like dairy and agriculture in the trade negotiations.
In the fiscal year 2023-24, US-India trade totaled USD 119.71 billion, with the US being India’s largest trading partner. During this period, India reported a trade surplus of USD 35.31 billion with the US, highlighting significant exports in areas such as pharmaceuticals and gems. Meanwhile, India’s imports from the US included substantial amounts of crude oil and machinery among others.
As the April 2 deadline approaches, global eyes will be on the potential economic repercussions of Trump’s tariff strategy, a move poised to redefine international trade relations. For India, finding a balance in trade negotiations with its largest partner will be key to minimizing impact while maximizing mutual benefits.
Original Source: https://www.livemint.com/news/us-news/how-will-india-react-to-reciprocal-tariffs-as-april-2-deadline-inches-closer-donald-trump-says-going-to-be-nicer-11743384261722.html
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Publish Date: 2025-03-31 07:55:00
