Formulate a plan to boost India's agricultural exports

Lowering tariffs to meet Trump's demands won't hurt if India can lift farm output and penetrate export markets

- AJIT RANADE

US President Donald Trump issued executive orders slapping high tariffs on imports from Canada, Mexico and China. For the rest, he has proposed a reciprocal tariff regime, pushing exporting countries to either reduce their respective import duties drastically or be shut out of the US market. This will be enforced from 2 April.

Never mind that applying selective tariffs violates the Most Favoured Nation (MFN) rules of the World Trade Organization (WTO). If someone raises an objection, WTO's dispute resolution mechanism is expected to deal with it. But that mechanism is broken partly because the US has blocked appointments to its appellate body. If pushed further, it is not inconceivable that the US may decide to walk out of the WTO, just like it withdrew from the World Health Organization. How are countries to navigate this uncharted territory in global trade wherein the world's biggest importer is using its leverage to bend or break rules? These countries are not taking it lying down.

Canada and China have slapped retaliatory tariffs. Ottawa says it will replace Californian tomatoes with Italian ones. China has imposed tariffs of 10-15% on US chicken, wheat, corn, soya, sorghum, dairy products and beef. These protectionist measures violate WTO rules. But here is another twist.

China has also applied retaliatory tariffs on Canada's rapeseed oil, aquatic products and pork in response to Canada's levies on Chinese electric vehicles, steel and aluminium.

This seems like an all-out trade and tariff war. But there are signs that the US may walk back, rethink and recalibrate. Or maybe not.

We are in uncharted territory.