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Trade wars lap Indian shores

US President Donald Trump’s overzealous pursuance of his “America First” policy is gradually stoking the embers of a global trade war that is also singeing its allies and strategic partners.

Trade wars lap Indian shores


US President Donald Trump’s overzealous pursuance of his “America First” policy is gradually stoking the embers of a global trade war that is also singeing its allies and strategic partners. China was Trump’s intended target but the collateral damage has been far and wide. The European Union has recently retaliated by imposing tariffs on over $3 billion of goods exported by its closest security partner. India, dragged unwittingly into this anti-China fusillade that has evolved into a global trade war, has hit back in equal measure by notifying higher customs duties on 29 goods imported from the US, including pulses, apples, walnuts and almonds. India is the world’s biggest importer of almonds from the US.

It is surprising that America is trying hard to invite Indian hostility for insignificant returns.  The genesis of the acrimony lies in President Trump’s fallacious argument that India’s high tariff wall is keeping out the iconic American motorbike, Harley-Davidson. The fact is Trump got his sums wrong. The bike does not attract high tariffs that Trump thought; besides, India had already slashed the import duty on the bike to 50 per cent and even the bike manufacturer was not unduly bothered by the import duty. But Trump’s blurring of lines between statesmanship and tradesmanship put India on his wrong side as far as trade was concerned.

A temporarily buoyant economy may be the reason behind the Trump administration’s overconfidence. But, these good times can only continue on sustained demand from friendly markets. India recently decided to buy American military helicopters for nearly $1 billion which has taken cumulative US defence exports to $15 billion. Next month’s first-ever 2+2 dialogue between Foreign Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman with their US counterparts should give a further impetus to defence trade. India has shown maturity by putting off the implementation of retaliatory tariffs to August; thus giving time for negotiators to get to work. The US must be mindful not to imperil its rising need for India in the security and defence spheres by turning the screws on the trade front for a few pennies more.

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