Mint Quick Edit | Trump’s tariff post: What should India do?

5 months ago 8

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An asymmetrical pact could prove worse for India than holding out for better terms.

Summary

Trump has declared a 25% tariff on US imports from India, plus a penalty for trade barriers and some purchases that are India’s own business. Time for some frank truth telling.

On Wednesday, US President Donald Trump made abundant use of capital letters in a message posted on Truth Social to lay out a tariff rate for imports from India, effective from 1 August: 25%. If this does not sound awfully punitive, there was a sting in the tail.

Also Read: India should use Trump’s playbook on Trump for a fair trade deal

An additional but unspecified “penalty" would be imposed, he added. To justify this, he listed out US grouses ranging from India’s “strenuous and obnoxious" non-monetary trade barriers, as he called them, to Indian purchases of arms and energy from Russia.

Also Read: Open-book test: The art of dealing with Trump the deal-maker

That his post began by acknowledging the friendship between the two countries is easy to forget amid the spate of large letters that end it. What, in these circumstances, could New Delhi do? The post can be interpreted as a prod to quickly sign a trade deal on offer.

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Yet, an asymmetrical pact could prove worse for India than holding out for better terms. After all, talks aren’t over yet, with US trade representatives expected to visit India next month to take them forward. The odds of a breakthrough now seem to have dimmed, sure, but it’s also important to signal that India’s sovereign decisions on armament and oil imports do not turn on a White House dime.

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