Weaponising Tariffs

There is no need for the government to conclude a bilateral deal on US's terms

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ITH AN INTERIM India-US trade deal stuck in limbo—despite five rounds of negotiations—US President Donald Trump has slapped a 25% tariff on India's goods to the US plus an additional penalty effective from August 1. That penalty pertains to India's purchases of Russian oil as sanctions on Moscow are imminent for its continued war with Ukraine. As if all of this were not bad enough, Trump has also earlier threatened to impose a tariff on Brazil, Russia, India, China, and South Africa (BRICS) for moving away from the US dollar. This is clearly an example of coercive diplomacy as Trump is weaponising tariffs to ensure that countries with trade surpluses with the US pay higher tariffs and adopt measures like energy and defence purchases from America to reduce their surpluses. The US president insists on zero duty access for US goods into their economy, which countries like India find difficult to accept. The Indian government, for its part, is closely examining Trump's tariff missive to fashion an appropriate polic