Editorial: Trump at it again
US President Donald Trump’s latest salvo at India, threatening to impose new tariffs on rice imports, should not come as a shock, as it follows a familiar pattern
United States President Donald Trump’s shenanigans have stopped surprising the world. His maverick and impulsive ways have pretty much become the new normal in international diplomacy. Trump’s latest salvo at India, threatening to impose new tariffs on rice imports, should not come as a surprise, as it fits into a familiar template. Arm-twisting and bullying have been his preferred modes of conducting diplomacy. Accusing India of dumping rice into the American market, he has declared that imposing additional tariffs will easily solve this problem. The threat comes at a time when the two countries are engaged in intense negotiations to finalise a trade deal. In fact, a high-level US delegation is currently in New Delhi for the talks. The Trump Administration appears to be in denial mode regarding the dynamics of international agricultural markets. Trump is caught in the mistaken notion that by threatening to hike import tariffs, he can extract concessions from India. The fact remains that it is the American consumer who will eventually be burdened by a higher tariff on rice imports from India. The Republican Administration continues to believe that tariffs are a magic bullet to solve domestic economic troubles, even though lower courts in the US have ruled against the use of emergency powers to impose them on nations around the world. The US Supreme Court is expected to decide the case. Trump’s remarks against India came on a day when he unveiled a USD 12 billion bailout package for American farmers, who have been hit hard by rising costs and market challenges stemming from disruptive tariff policies and the trade dispute with China.
In the past, Indian rice was subject to a 10 per cent duty in the US market. With a 50 per cent tariff now in place, the duty has risen by 40 percentage points. Despite the steep hike, exports have continued, underscoring rice’s position as an essential item in the consumer basket. The Indian rice export industry is resilient and globally competitive. No doubt the US is an important destination, and India’s rice exports are well-diversified across global markets. Exporters continue to deepen the existing trade partnerships and open new markets for Indian rice. American farmers, who represent Trump’s traditional support base, have flagged a decline in rice prices, claiming that imports from countries like India, Vietnam and Thailand are playing spoilsport. The US President has latched on to this issue to step up pressure on New Delhi over the imminent trade deal. He wants India to open its markets to a wide range of American products in the dairy and agriculture sectors. Trump’s fresh threat comes at a time when the US economy remains strained. Farmers have also been struggling with higher input costs and tougher market conditions. Earlier this year, the US imposed 50 per cent tariffs on Indian goods, citing trade barriers and India’s crude oil purchase from Russia.
