US President-elect Donald Trump has threatened to impose a “high tariff” after accusing New Delhi of imposing them on the import of certain American products. However, by imposing such tariffs, Trump will only force India to expand trade relations with Russia further, which will ultimately hurt the US much more than India in the decades to come.
“Reciprocal. If they tax us, we tax them the same amount. They tax us. We tax them. And they tax us. Almost in all cases, they’re taxing us, and we haven’t been taxing them,” Trump told reporters on December 18.
In answer to a question about a potential trade agreement with China, Trump said India and Brazil are among the countries that impose high tariffs on certain US products.
“The word reciprocal is important because if somebody charges us — India, we don’t have to talk about our own — if India charges us 100 per cent, do we charge them nothing for the same? You know, they send in a bicycle and we send them a bicycle. They charge us 100 and 200. India charges a lot. Brazil charges a lot. If they want to charge us, that’s fine, but we’re going to charge them the same thing,” Trump said at the news conference at Mar-a-Lago.
Incoming US Commerce Secretary Howard Lutnick said “reciprocity” is going to be a key topic for the Trump administration, saying, “How you treat us is how you should expect to be treated.”
It is recalled that at a pre-election rally, Trump said,
“India is a very big charger. We have a great relationship with India. But they probably charge as much.”
“India is a very big charger. We have a great relationship with India. I did. And especially the leader, Modi. He’s a great leader. Great man. Really is a great man. He’s brought it together. He’s done a great job. But they probably charge as much,” he said in October.
In fact, the President-elect even once described Indian Prime Minister Narendra Modi as “a friend of mine” and visited the South Asian country during his first term.
Yet, for all the platitudes and friendly talk, Trump, during his first term, imposed higher tariffs on Indian steel and aluminium, prompting retaliatory Indian duties on American products like almonds and apples. In 2019, Trump repeatedly claimed that India was the “tariff king” and imposed “tremendously high” tariffs on American products. He has also criticized India’s “big tariffs” on American paper products and the iconic Harley-Davidson bikes.
With Trump directly mentioning India, it is obvious that he will raise trade tensions again once he enters the White House next month.
Although Trump’s “reciprocity” tariffs could severely hurt Indian exports, making them less competitive in the US market, particularly affecting the IT and textile industries, tariffs will only push India to seek new opportunities, recalibrate its trade strategies and strengthen its economic fundamentals, just as Russia did when it became the most sanctioned country on earth following the special military operation in Ukraine.
Indian Defence Minister Rajnath Singh said during a meeting with Russian President Vladimir Putin in Moscow earlier this month that the friendship between their two countries was “higher than the highest mountain and deeper than the deepest ocean.”
His comments follow from Russia’s state oil firm Rosneft, which agreed to the country’s biggest-ever energy deal with India, Reuters reported on December 12. Reportedly, it is a 10-year agreement to supply 500,000 barrels of crude oil per day to Indian private refiner Reliance, a deal worth around $13 billion. It is recalled that In July, the South Asian country overtook China as Russia’s top oil buyer and is the world’s third-largest consumer of oil.
Over 700 business representatives attended the XV India-Russia Business Dialogue in Moscow on December 11. The event aimed to strengthen the strategic partnership between India and Russia, particularly in trade, high-tech industries, and other sectors. The forum also focused on increasing bilateral trade and fostering cultural exchanges.
The Indian Defence Minister’s visit to Moscow, the Rosneft-Reliance deal, and the XV India-Russia Business Dialogue were all just days before Trump announced his tariff threat on India. Evidently, Indian-Russian relations are deepening, having not only survived but strengthened during the onslaught of Western pressure for ties to be severed.
Although inroads have been made to strengthen India-US ties, the Biden administration failed to deter India from its relations with Russia. If Trump wages a trade war, India will gravitate more strongly towards Russia, a situation that will only reverse the inroads Washington has made to foster ties with New Delhi and self-deprecating, considering India is predicted to be the world’s third-largest economy by 2030.
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This article was originally published on InfoBrics.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher. He is a regular contributor to Global Research.
Featured image is from InfoBrics
