Trump at it again

US President's tariff threat seems to be a ploy to put pressure ahead of the trade talks to extract more from India

AuthorPublished: 11th Jul 2019  12:17 amUpdated: 10th Jul 2019  11:38 pm

At a time when India and the United States have done well to set in motion a negotiation process to resolve bilateral trade disputes, President Donald Trump is back to his bellicose ways when he tweeted that New Delhi’s high tariff regime was not acceptable to his country. Such periodic threats from the maverick President would cast a shadow on the process of talks and create avoidable tension in the bilateral relations. This could be a ploy on Trump’s part to put pressure ahead of the trade talks to extract more from India. Assistant US trade representative Chris Wilson and deputy assistant Brendan Lynch are arriving in Delhi later this week for talks with Indian officials to break the deadlock in trade ties. It must be pointed out that Trump had tweeted on similar lines, slamming higher tariffs for American products, ahead of his talks with Prime Minister Narendra Modi on the sidelines of the G20 summit in Japan last month. Trade between the two countries stood at $142.1 billion in 2018, with India having a surplus of $24.2 billion. Despite being natural allies with close political and security ties, the bilateral trade has not been performing to the full potential. In any multi-dimensional relationship, there are bound to be differences in certain areas and convergence in others. Pragmatic and mutually accommodative approach is the way forward because the Indo-US bond is too deep and wide-ranging to be distracted by the irritants on the trade front.

The fears of a full-blown trade war had faded into the background after the Trump-Modi meeting in Osaka where they did well to skirt the contentious issues and instead instructed their respective officials to sort out the trade disputes. It was a clear climbdown for Trump after making some belligerent noises. On its part, New Delhi has moved on gracefully after the US withdrew the preferential trade benefits to Indian exporters. The US also must address India’s market access issues with a pragmatic and accommodative approach. Last month, Trump had demanded withdrawal of retaliatory tariffs imposed by New Delhi in a stern message that signalled deterioration the trade ties. India had slapped higher duties on 28 American products after the US terminated special trade status under the Generalised System of Preference (GSP). Washington is also upset with New Delhi’s plans to restrict cross-border data flows and impose stricter rules on e-commerce that hurt US firms operating in India. The tariff tantrum of Trump began last year when his administration hiked tariffs on import of aluminium and steel from many countries, including India and the European Union. In the name of his ‘America First’ narrative, Trump has been adopting policies that often border on protectionism.


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