Trump's Tariff Policy: A New Challenge for India-U.S. Relations

Earlier this month, President Donald Trump of the United States of America accused India, the European Union, Mexico, Brazil, and other countries of having trade practices that are unfair to the United States.

- DR. ALISHA VERMA

Earlier this month, President Donald Trump of the United States of America accused India, the European Union, Mexico, Brazil, and other countries of having trade practices that are unfair to the United States. He also specified that "reciprocal tariffs" will be enforced beginning on April 2. In his statement, Trump emphasized that this action will produce considerable cash for the United States of America and create employment. He also stated that the country has been taken advantage of for decades, but that it will no longer allow this behavior. Emphasizing the inequity of the system, Trump stated, "This system is not fair to the United States and never was; hence we will impose tariffs on other countries in response to the tariffs they impose on us."

WHAT IS TARIFF? Tariffs apply to foreign imports. Companies that import commodities pay taxes to the government. Tariffs are usually a proportion of product value. For example, a $10 foreign product costs $3 more due to a 30% tax. Companies may pass on tariff costs to customers. U.S. products tariffs are usually lower than others. The extra taxes and tariffs on international imports Trump has hinted may begin on April 2 might raise costs for U.S. and global consumers, economists say.