Trump threatens to impose reciprocal tax on India

Says India and Brazil among countries that impose high tariffs on certain US products

Washington: US President-elect Donald Trump has reiterated his intention to impose reciprocal tariffs in retaliation for the high tariff imposed by India on the import of certain American products.

Trump made these remarks on Tuesday and also said India and Brazil were among countries that impose high tariffs on certain US products.

---

“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 said.

He made the remarks while responding to a question on a potential trade agreement with China. Trump said India and Brazil were among 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 a news conference at Mar-a-Lago.

Responding to a question, his Commerce Secretary pick Howard Lutnick said “reciprocity” is something that is going to be a key topic for the Trump administration. “How you treat us is how you should expect to be treated,” he said.

During his election campaign in October, Trump has claimed that India imposes the highest tariffs on foreign products. But they do it with a smile.

“Perhaps the most important element of my plan to make America extraordinarily wealthy again is reciprocity. It’s a word that’s very important in my plan because we generally don’t charge tariffs. I started that process, it was so great, with the vans and the small trucks, etc,” Trump had said in October.

In 2019, Trump repeatedly claimed that India is a “tariff king” and imposes “tremendously high” tariffs on American products.

He has criticised India’s “big tariffs” on American paper products and the iconic Harley-Davidson bikes.

The US is the largest trading partner of India in 2023-24. India’s exports stood at $77.51 billion, while imports aggregated at $42.2 billion in the last fiscal.

During April-October this fiscal, the country’s exports to America rose by 6.31 per cent to $47.24 billion, while imports grew by 2.46 per cent to $26 billion.

Between FY 2020 and FY 2024, India’s merchandise exports to America rose by 46 per cent from $53.1 billion to $77.5 billion.

Imports from the US also grew to #42.2 billion last fiscal from #35.8 billion in 2019-20.

On the other hand, trade in services between the two nations expanded 30.3 per cent from $54.1 billion in 2018 to an estimated $70.5 billion in 2024.

India is also a key destination for American businesses such as professional, scientific, and technical services, manufacturing and IT. Washington is the third largest investor.

India received $66.7 billion of FDI inflow between April 2000 and June 2024.