Editorial: Trump’s tariff tantrums
United States President’s tariff war has virtually undone efforts put in by India-US to deepen their economic and strategic cooperation
India should stand firm in the face of the bullying tactics of United States President Donald Trump, whose disparaging words and undiplomatic actions on the issue of reciprocal tariffs are simply unacceptable. A bizarre fallout of Trump’s shenanigans is that they are hurting America’s long-standing friends more than its rivals. By mocking the Indian economy and imposing a 25 per cent reciprocal tariff on Indian goods, along with an unspecified penalty for continuing business ties with Russia, he has virtually undone the meticulous efforts put in by the two countries to deepen their economic and strategic cooperation. An unhinged Trump appears bent on destroying the diplomatic niceties. His unilateral tariff announcement came even as the two sides are engaged in negotiations to hammer out a comprehensive trade deal. US officials are scheduled to visit India later this month for the sixth round of trade talks. Trump’s latest decision puts India at a disadvantage vis-à-vis its competitors. What complicates the equation for India is that the Chinese are at an advanced stage of negotiations towards a deal, which could have a favourable tariff rate. Trump’s hyphenation of the trade deal with India’s economic relationship with Russia further complicates the situation. New Delhi needs to strike a delicate balance in the negotiations as the interests of farmers, labourers, small and medium entrepreneurs, exporters, and other industrial stakeholders must be protected at any cost. Union Commerce Minister Piyush Goyal did the right thing by rubbishing Trump’s irresponsible remark describing India as a ‘dead economy’.
The Trump Administration needs to learn basic lessons on international diplomacy and respect the sovereign decision-making of the nations. As Congress leader Shashi Tharoor put it, Trump’s approach underscores a transactional worldview that views trade deficits as personal affronts and strategic autonomy as a hostile act. India is not only the world’s fastest-growing major economy, but it will soon become the third-largest. India rejects the idea of being treated as a subordinate in global trade relations. Goyal’s articulation projected India not as a defensive partner on the back foot, but as an assertive, confident global economy that demands respect and parity in negotiations. On its part, India has taken a fair and pragmatic stand and already announced slashing tariffs on over half of US imports. By publicly deriding India and slapping tariffs on its exports, Trump may have crossed the red line. Instead of prompting India toward compromise, his comments have hardened New Delhi’s stand. It is now politically impossible for India to be seen as succumbing to American pressure. India now finds itself in a position where public perception, domestic politics and economic strategy all align in favour of a firm approach. If the US wants a meaningful, long-term economic relationship with India, it may have to abandon the current posture of economic arm-twisting. The ball is now in America’s court.
