U.S. President Trump plans to implement reciprocal tariffs on all countries by April 2, with potential impacts on India’s economy as negotiations for a bilateral trade agreement unfold. The focus is on addressing trade imbalances while concerns grow regarding a possible trade war. India aims for increased cooperation, yet sensitive sectors like agriculture may remain excluded from discussions.
As the April 2 deadline approaches, U.S. President Donald Trump intends to implement reciprocal tariffs targeting all nations, contrary to earlier speculations of limiting the focus to just 10 to 15 countries. Trump remarked, “You’d start with all countries, so let’s see what happens.” The tariffs are designed to rectify trade imbalances and generate revenue for domestic priorities, including tax cuts and promises for the 2024 campaign.
The exact details about the tariffs, including calculations and possible exemptions, remain unspecified by the White House. Economic adviser Kevin Hassett noted that targeted countries would likely include those with substantial trade imbalances. Trump has emphasized that tariffs will account for foreign non-tariff barriers, though how these will be assessed has not been detailed yet.
While Trump perceives tariffs as a protective measure for the U.S. economy and as leverage in trade negotiations, there are growing concerns regarding potential repercussions, such as market instability and the prospect of a trade war. UK Secretary of State Yvette Cooper expressed apprehension, stating, “If you increase barriers to trade right across the world, that’s not good for the world economy.”
Both India and the U.S. aim to engage in sectoral discussions under a proposed bilateral trade agreement (BTA) soon, following productive negotiations. The objective is to finalize the initial phase of the agreement by fall 2025 and more than double bilateral trade to USD 500 billion by 2030. India seeks duty reductions in labor-intensive industries in exchange for concessions across various sectors.
American industries are lobbying for safeguarding measures against reciprocal tariffs which could adversely affect Indian exporters. As India is the U.S.’s largest trading partner, any tariffs could have significant consequences. Though India has expressed intent to collaborate, sectors like dairy and agriculture may remain excluded from negotiations due to political sensitivities.
In 2024, U.S. agricultural exports to India reached USD 1.6 billion, while India’s exports to the U.S. comprised pharmaceuticals and electronics, among other goods. Total bilateral trade with the U.S. for 2023-24 was valued at USD 119.71 billion with a trade surplus for India. Since April 2000, India has attracted significant foreign direct investment from the U.S., totaling USD 67.8 billion up to September 2024.
In summary, as reciprocal tariffs loom, both the U.S. and India navigate complex trade negotiations aimed at enhancing bilateral relations while mitigating potential impacts of tariffs on their economies. Trump’s strategy seeks to adjust trade imbalances, yet it raises concerns regarding global economic stability. As both nations work towards a comprehensive trade agreement, the outcome will significantly influence the future of their economic partnership.
Original Source: www.livemint.com
