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Informist, Friday, Feb. 14, 2025

NEW DELHI – US President Donald Trump on Thursday termed India as one of the highest tariff countries in the world. "India charges more tariffs than any other country. It's hard to sell in India because they have very strong tariffs...Whatever India charges us, we'll charge them...Reciprocal tariffs are the fair way to go," Trump said at a press briefing along with Prime Minister Narendra Modi. 

 

Ahead of the meeting with Modi, Trump signed an order asking his team to develop a comprehensive plan for reciprocal tariffs on every country taxing US imports. "On trade, I have decided for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them. No more, no less," Trump said. 

 

According to a statement on Trump's order released by the White House, lack of reciprocity is one of the sources of the US' large and persistent annual trade deficit in goods. "Closed markets abroad reduce US exports and open markets at home result in significant imports, both of which undercut US competitiveness. The US has run a trade deficit of goods every year since 1975. In 2024, our trade deficit in goods exceeded $1 trillion. Thanks to the proliferation of non-reciprocal barriers in just the last few years, the US now runs a trade deficit in agriculture, worth around $40 billion in 2024," the statement read. 

 

The Trump administration also cited high tariffs imposed by India as an example of trading partners not giving the US reciprocal treatment.

 

"The US average applied Most Favored Nation tariff on agricultural goods is 5%. But India's average applied Most Favoured Nation tariff is 39%. India also charges a 100% tariff on US motorcycles, while we only charge a 2.4% tariff on Indian motorcycles," the statement read. 

 

"Traditionally, India is right at the top of the pack pretty much. There are a couple of smaller countries that are actually more but India charges tremendous tariffs. Whatever they charge us, we are charging them. I remember when Harley Davidson couldn't sell their motorbikes in India because of the fact that in India - the tax was so high, the tariff was so high, and Harley was forced to build... But I think they built a factory in India in order to avoid paying the tariffs. And that's what people can do with us. They can build a factory here, a plant or whatever it may be here and that includes the medical, that includes cars, that includes chips and semiconductors," Trump said.

 

Since the beginning of his second term in White House, Trump has levied tariffs on several countries, including China, threatening a global trade war. The tariffs have also threatened to accelerate inflation in the US.

 

Trump has also announced tariffs on all steel and aluminium imports into the US from Mar. 12, and imposed 10% tariffs on goods from China.  End

 

US$1 = INR 86.90

 

Reported by Kuldeep Singh

Edited by Avishek Dutta

 

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