Trump Asks India to Reverse ‘Unacceptable’ Tariffs on U.S. Goods
India slapped tariffs on nearly 30 American products in response to higher duties imposed by the U.S.
(Bloomberg) --
President Donald Trump called on India to withdraw an “unacceptable” increase in tariffs on U.S. goods, ratcheting up tension against the Asian nation before a planned meeting with Prime Minister Narendra Modi.
“India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further,” Trump said in a Twitter post, his first direct response to India’s move earlier this month to raise tariffs on a slew of products from walnuts to pulses.
The tariffs on almost 30 American products came in response to higher duties imposed by the U.S. and Trump’s move June 1 to end trade concessions on $6.3 billion of Indian goods. Modi’s administration repeatedly deferred the move, originally announced in June last year, as it sought to relieve trade tensions through talks.
India levies an average tariff of 6.94% on imports, slightly higher than 6.01% in the U.S. and 6.06% in China, according to World Bank data as of 2017. But, what particularly riled Trump was New Delhi imposing tariffs as high as 100% on Harley-Davidson Inc. motorcycles -- an issue he had flagged in a joint address to Congress in February 2017.
The trade dispute is among several hampering closer U.S.-India cooperation just as Trump’s administration also seeks Modi’s help in countering China in the region. The two countries have also sparred over India’s desire to buy the Russian-made S-400 missile defense system and purchase of oil from Iran, moves that would run counter to U.S. sanctions.
‘Useful Card’
“Now you know why India recently imposed retaliatory tariffs that had been put off for a year,” said Tanvi Madan, a fellow at the Brookings Institution think-tank who researches U.S.-India relations. “Makes for a useful card in negotiations. Now India can use their withdrawal (as DJT wants) as a ‘give’/concession.”
Trump is also due to hold a trilateral meeting with Modi and Japan Prime Minister Shinzo Abe on Friday, part of U.S. efforts to bring together countries wary of China’s increasing economic and military might. Still, efforts at formal collaboration have largely stalled.
On a visit to New Delhi on Wednesday, Secretary of State Michael Pompeo stressed the strength of the U.S.-India relationship and called for them to embark on a “new age of ambition.” They needed to overcome a “nagging misconception that our countries are not able to be full partners,” he said, referring to India’s Cold War alliance with the Soviet Union.
Yet Pompeo also included a list of demands, including the pressure to cut oil imports from Iran and Venezuela, to steer away from Huawei Technologies Co. in 5G networks, and to cut links with North Korea’s economy. He acknowledged that India’s decision to cut oil purchases came at a cost, adding that the U.S. is doing “everything we can’’ to ensure adequate fuel imports for India.
India’s External Affairs Minister Subrahmanyam Jaishankar said a key part of having a strategic relationship “is to comprehend the other nation’s interest.”
“Harmonizing our interests and our views, that’s really the task of diplomacy,” he said alongside Pompeo. “I think Secretary Pompeo would agree with me today that we have earned our pay.”
--With assistance from Subramaniam Sharma, Jeanette Rodrigues and Vrishti Beniwal.
To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Daniel Ten Kate
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