Grappling with America First

GETTING TRAPPED IN A FREE TRADE AGREEMENT NEGOTIATION WOULD NOT SERVE INDIA'S INTERESTS

- ABHIJIT DAS

President Donald Trump's America First trade policy has created turmoil across continents. Colombia, Canada, Mexico, and China have already faced the brunt of the muscular use of tariffs by the US for supposedly addressing illegal immigrants and illegal sales of fentanyl. President Trump has also threatened the European Union with high tariffs. What goals Trump will seek to achieve with his tariff threat and which country he will strike next remains uncertain.

While India has managed to stave off any immediate tariff threat, the signs appear to be ominous. In the past, Trump has accused the country of being a tariff abuser and currency manipulator—accusations which have been strongly denied by the Indian government. India should brace itself for being required to accommodate the economic interests of the US.

With the US accounting for almost 17% of India's merchandise exports and our overwhelming dependence on it for exports of information technology services, we are undoubtedly vulnerable to pressures from the US. On the trade front, what could be the demands made by the US on India? The 2024 National Trade Estimate Report on Foreign Trade Barriers (NTE report) brought out by the United States Trade Representative, which contains a laundry list of perceived grievances against its trading partners, provides some pointers.