U.S. President Trump is preparing to introduce reciprocal tariffs on April 2, targeting all countries initially, contrary to earlier claims. Intended to realign trade balances, these tariffs may unsettle markets, prompting discussions with India on a Bilateral Trade Agreement. Both nations seek to negotiate terms while addressing the potential economic fallout.
On the brink of introducing reciprocal tariffs on April 2, U.S. President Donald Trump has shifted the narrative, insisting the initiative will apply to all countries, contrary to earlier speculations targeting a specific subset. “You’d start with all countries, so let’s see what happens,” Trump declared aboard Air Force One. This strategy aims to realign global trade while generating revenue for U.S. domestic priorities, including tax extensions from his initial term and promises made for the upcoming 2024 campaign.
White House economic adviser Kevin Hassett indicated that while the tariffs will focus on 10 to 15 nations with significant trade disparities, specifics such as the targeted countries and how the tariffs will be calculated remain unspecified. Furthermore, Trump has indicated that the tariffs will consider non-tariff barriers from other nations, although no details have been shared on the methodology to achieve these assessments.
The prospect of these tariffs has raised concerns regarding their potential economic impact, as UK Secretary of State, Yvette Cooper, remarked about the universally adverse effects of increasing trade barriers. Trump’s approach is perceived as a protective measure against unfair international competition, although the looming threat of trade conflict has already induced market instability and recession fears in the United States.
India and the United States are set to enhance sectoral talks related to their proposed Bilateral Trade Agreement (BTA). This initiative follows four days of fruitful negotiations, with plans for virtual meetings commencing shortly, paving the way for in-person discussions. The goal is to finalize a phase of the agreement by fall 2025 and to expand bilateral trade significantly from USD 190 billion to USD 500 billion by 2030.
The United States has sought tariff concessions in various sectors, including automobiles and agricultural products, while India is expected to advocate for tariff reductions in labor-intensive sectors like textiles. Trump’s comments affirm a positive relationship with Indian Prime Minister Narendra Modi, underscoring optimism for constructive tariff negotiations.
In light of potential U.S. tariffs, Indian industries are advocating for governmental protections due to the adverse effects on their export markets, particularly as the U.S. is India’s largest trading partner. The U.S. is keen on improving access for its businesses within India, especially in the sensitive agricultural sector, where negotiations may prove challenging. The bilateral trade in 2024 saw significant exchanges with India’s primary exports being pharmaceutical formulations and precious stones, alongside substantial imports primarily in petroleum and machinery.
In summary, as the April 2 deadline for reciprocal tariffs approaches, the U.S. under President Trump’s administration is set to pursue a comprehensive international tariff strategy that may severely impact countries like India. The proposed tariff measures are aimed at reducing trade imbalances while also influencing the bilateral trade agreement between the two nations. Both sides are engaged in discussions, yet uncertainties remain as to how these tariffs will affect global trade dynamics and local economies.
Original Source: www.livemint.com
