Trump announces 26% reciprocal tariff on Indian goods. Targets agri products

New Delhi: US President Donald Trump on Wednesday announced a 26 per cent reciprocal tariff on India, lower than the 34 per cent imposed on China and 46 per cent on Vietnam, both of which are among the top exporters to the US and key competitors in the American market.

However, the tariffs imposed on India were higher than the 24 per cent duty on Japan, 25 per cent on South Korea, 24 per cent on Malaysia, 20 per cent on the European Union, and 10 per cent on the UK. Notably, Trump announced 32 per cent tariffs on Taiwan, a key chip manufacturing centre.

“The Indian Prime Minister just left. He’s a great friend of mine, but I said, ‘You’re a friend of mine, but you’re not treating us right.’ They charge us 52 per cent , and we have charged them almost nothing for years and years,” Trump said while announcing the reciprocal tariffs on India during a press briefing at the White House.

Trump stated that the US is only charging half the tariffs that other countries are imposing.

USTR on India

The USTR report on trade barriers had criticised India’s high applied tariffs on a wide range of goods, including vegetable oils, apples, maize, motorcycles, automobiles, flowers, natural rubber, coffee, raisins, walnuts, and alcoholic beverages. It noted that the gap between India’s WTO-bound and applied tariff rates allows the government to adjust tariffs unpredictably, creating uncertainty for US stakeholders.

“The Indian government has leveraged this flexibility, increasing tariffs on approximately 70 product categories in the 2019/2020 budget and on 31 categories in 2020/2021, including key US exports,” the report said.

The report flagged India’s regulations on the import of milk, pork, and fish products, stating that they require genetically modified (GM)-free certificates “without providing a scientific or risk-based justification.”

The report reiterated a long-standing American concern over India’s agricultural support programmes, which, according to the US, distort markets. However, Indian officials have argued that US subsidies for farmers are much higher than those provided by India.