TRUMP'S TRADE TANGO

The return of Donald Trump as the 47th President of the US has put the global economy on edge. India, too, is unlikely to remain unaffected. How will policymakers meet this latest challenge?

- SURABHI

WILL HE, OR won't he? This seems to be the key question being asked around the world as Donald Trump stages a comeback to the White House as the 47th President of the US. Trump has vowed to raise tariffs on imports into the US as part of his plan to rebuild the American economy as the world's greatest one, leaving policymakers and industry on edge around the planet.

Trump's proposals on tariffs, which were a part of his election campaign for the presidency, aim to lower corporate tax rates for companies manufacturing in the US to 15% from the current 21%; he also plans to hike tariffs by as much as 60-100% on Chinese imports into the country. For imports from other countries, Trump intends to raise tariffs by 10-20%. These tariff actions could upend global trade and fuel inflation and tighten monetary policy across the US and the world, even if they may boost the American economy in the short run.

INDIA-US TRADE

For now, India seems to have been spared. Trump has pledged higher tariffs on three of the US's largest trading partners-Canada, Mexico and China. He has promised to impose a 25% tariff on imports from Canada and Mexico until they checked drugs and migrants crossing over to the US. Plus, he has vowed to impose an additional tariff of 10% on imports from China. Mexico and Canada are reviewing the announcement.

In India, the government is closely monitoring the developments in the US to assess the impact of any such move on the domestic economy that is in the midst of a slowdown, and exports that seemed to have picked up pace only recently. While trade between India and the US has grown steadily over the years, the relations between the two countries have been rocky at times, with numerous disputes taken up at the World Trade Organization and demands by Washington-to lower tariffs and provide more market access-that have often not been accepted by New Delhi.