Trump's Tariff Cut Hopes From India Too Ambitious

MARK LINSCOTT, former assistant United States Trade Representative (USTR) for South and Central Asia, led negotiations for the unsuccessful mini-trade deal with India during Donald Trump's first term as US President. Now a senior advisor with the US India Strategic Partnership Forum (USISPF), Linscott, in an email interview with Asit Ranjan Mishra, discusses the potential impact of Trump's reciprocal tariffs on India and feasibility of the proposed bilateral trade agreement (BTA). Edited excerpts:

- MARK LINSCOTT, former assistant United States Trade Representative (USTR) for South and Central Asia

How do you think the reciprocal tariffs that are set to kick in from April 2, could be structured, especially for India?

Frankly, it's hard to say. I sense some in the Trump administration don't want to over-complicate an already complicated scenario. My bet is that reciprocal tariffs applied to any trading partner in April will use a simple average tariff rather than a trade-weighted one. The tariff applied will likely be set at a level to provide for equivalence with India's simple average applied tariff.

How seriously could reciprocal tariffs hurt India and which sectors could be worst hit?

No country's exporters favor new tariffs and there can be real impacts, especially for price-sensitive sectors that face plenty of competition in global markets. If a reciprocal tariff in the range of 10 to 15 percent across-the-board was applied to India or any target country, the impacts will be significant for most exports. Above that level could even shut down exports of some products, all depending on whether many countries are hit simultaneously.

Since India has agreed to negotiate a bilateral trade agreement (BTA) with the US, do you think the Trump administration will spare New Delhi from reciprocal tariffs or use them as a bargaining tool?