TRUMP'S TARIFF FRENZY

India should be most concerned about 'reciprocal tariffs' as Donald Trump seeks to pry open the country's agricultural markets for US' agri-business companies

- BISWAJIT DHAR

THE EXTRAORDINARY step that US President Donald Trump has taken on April 2 by imposing “reciprocal tariffs”, which he described as the “declaration of economic independence”, has thrown the global economy in the throes of severe uncertainties that have never been seen since the Great Depression during the 1930s. Trump unveiled the “reciprocal tariffs” through the Executive Order, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits”. As many as 57 countries were targeted through the imposition of “reciprocal tariffs”, ranging from 11 per cent to 49 per cent, which were to be introduced on April 9. But a few days earlier, on April 5, an additional ad valorem duty of 10 per cent was imposed on all imports from all trading partners. The “reciprocal tariff” on India was 26 per cent, implying that all exports to its largest export market are facing 36 per cent tariffs. These are sufficiently steep to seriously impinge on export prospects of several key industries for whom the US is a major market.

India’s South Asian neighbours have been slapped “reciprocal tariffs” that are much higher. Sri Lanka faces the highest “reciprocal tariff” of 44 per cent (54 per cent overall), while for Bangladesh and Pakistan the overall tariff burden would be 47 per cent and 40 per cent respectively.