As the White House is obstructed by the unending conflict in Ukraine, President Donald Trump has announced a 25% tariff on Indian goods as well as an unspecified fine for purchasing Russian oil and military equipment.
Trump claimed on his Truth Social account on Wednesday that the trade actions are necessary to correct a long-standing trade imbalance, which he claimed will take effect on Friday.
Trump wrote, “While India is our friend, we have done comparatively little business with them because their tariffs are too high,” Trump continued.
The president also attributed India’s purchase of Russian military equipment and oil, which he claimed helped to fuel the conflict in Ukraine. As a result of the launch of his administration’s revised tariffs on various nations, he intends to impose an additional “penalty” starting on Friday.
The Indian government said in a statement on Wednesday that it was considering Trump’s tariff decision.
Trump’s ties with India’s Prime Minister Narendra Modi, who were friendly during the US president’s first term but have since encountered difficulties with trade and immigration, are further complicated by the aggressive trade policy. Modi has also refuted Trump’s claims that he intervened in a four-day conflict with Pakistan in May, saying that India will never “accept mediation” and that he will never do so.
Prior to and following the conflict with India, Pakistan, in contrast, saw its stock increase under the Trump administration. For the first time in a US president’s visit to a military chief from Pakistan who is not also the country’s head of state, Trump hosted Pakistan’s army chief Asim Munir for lunch at the White House in June.
Trump claimed that the US announcement would open markets for US goods while allowing the US to raise import tax rates would be the result of a string of negotiated trade agreements with the European Union, Japan, the Philippines, and Indonesia. Trump sees tariff revenues as a way to offset the increase in the budget due to his most recent income tax cuts and increase the number of domestic factory jobs.
The economic impact of Trump’s effective use of tariffs as a cudgel to reset the terms of trade is uncertain because most economists anticipate a slowerdown in US growth and higher inflationary pressures as domestic businesses and consumers are burdened by the costs of the taxes.
According to the Census Bureau, the US imported more goods from India last year than it exported, accounting for a $35.8 billion trade imbalance.
India is the largest nation in the world and a potential geopolitical counterbalance to China with a population of 1.4 billion people. Russia and India have close ties, and New Delhi has not opposed Western sanctions against Moscow for its conflict in Ukraine.
The US president announced that India would begin purchasing US oil and natural gas when Trump and Modi met in February.
Trump and reporters who were on his way home from a five-day visit to Scotland on Tuesday discussed his trade and tariff policies. When questioned about reports that India was anticipating a US tariff rate of at least 25%, he said, “We’re going to see.”
Source: Aljazeera
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