Donald Trump Excludes India in New Tariffs, Targets China, Mexico, and Canada

Donald Trump: According to The Indian Express, US President Donald Trump did not name India in the initial set of tariffs on Friday, which included a 25 percent tariff on Mexico and Canada and a 10 percent tariff on China, citing "huge trade deficit".

The new measures, effective starting February 1, focus on those countries that contribute the most to the US trade deficit.

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China, Mexico, and Canada are the highest contributors of US trade deficit, with China at 30.2 percent, Mexico at 19 percent, and Canada at 14 percent, while India contributing just 3.2 percent is the ninth-largest contributor, as per the report of Research and Information System (RIS).

“We have big deficits with all three of them. And in one case, they’re sending massive amounts of fentanyl, killing hundreds of thousands of people a year with fentanyl. And in the other two cases, they’re making it possible for this poison to get in. We have about a $200 billion deficit with Canada… and a $250 billion trade deficit with Mexico,” Trump said during a press briefing.

According to the Economic Survey released on Friday, India has seen a change in its import tariff policy, trying to reconcile domestic objectives with the need for global economic integration.

“Tariffs vary by sector, with considerations such as protecting sensitive sectors from foreign competition and permitting access to important raw materials and intermediate goods. India has ensured that tariff policies comply with WTO rules and regulations. Over time, several efforts have been made to rationalise tariffs further and address the inverted duty structures,” the survey said.

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In its report published on January 17, the Peterson Institute for International Economics warned that US imposition of a 10 percent tariff on China, followed by retaliation by China, would cut down US GDP by $55 billion in over four years, and China itself would lose out on $128 billion.

“Inflation would increase by 20 basis points in the US, and after an initial dip, by 30 basis points in China. The initial fall in inflation in China is caused by a temporary tightening of Chinese monetary policy aimed at offsetting the depreciation of the Chinese currency,” the report stated.

In December NITI Aayog CEO BVR Subrahmanyam told that trade policies under president-elect Donald Trump could potentially lead to some boom for India, owing to major trade diversions in global trade, the report said.

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