Trump's high tariffs on several countries to hold back US economic growth: Harvard University economist

Harvard University economist Kenneth Rogoff on Wednesday said the high tariffs on several countries, including India, and the steep H-1B visa fee hike imposed by the Trump administration will hold back the US economic growth.

US President Donald Trump's decision to increase the application fee for H-1B visas is expected to impact Indian nationals, who accounted for almost 70 per cent of all such visas issued in the last few years.

"The new visa rules were done in a very haphazard manner and not in a very thoughtful way. The visas for high-skilled workers should be given very liberally," Rogoff said in an interview.

The Trump administration's decision to increase the H-1B visa application fee came amid a downturn in bilateral ties after Washington imposed 50 per cent tariffs on Indian goods.

"If I were to look at factors holding back the US growth, why I believe US growth is likely to slow down, I would say the tariffs are one reason, but the restrictions on immigration are a huge reason that is going to hold back the US growth," he said.

At present, the H-1B visa fee that companies pay to sponsor applicants ranges from about USD 2,000 to USD 5,000, depending on employer size and other costs.

"If you were to go to California and go around Silicon Valley, the number of Indian engineers, software engineers, the number of Indians who had majored in the big tech companies, it is phenomenal.

"If you cut off this super talent pool, it is going to have very big effects," Rogoff, also a former chief economist at the IMF, noted.

He emphasised that the H-1B visa tax is a mistake and the US government should expand the number of these visas.

Rogoff, also an international grandmaster of chess, said India is going to play a larger role over time.

"And so, this idea of sort of declaring a tariff war on India and thinking you can make up later is a very aggressive move.

"So, India is fortunate in being a relatively closed economy most of the time," he observed.

Rogoff suggested that India has to lower its tariffs and seek trade with other countries.

Asked if India should stop buying cheap Russian oil after Trump imposed an additional 25 per cent levy, he said, "I hesitate to wade into that. That is a choice India is going to make".

India is one of the largest importers of Russian crude. The country purchased 1.6 million barrels per day in July.

"I am an American, and we have been very supportive of Ukraine. So, from that perspective, I would like to see India purchase less, much less Russian oil.

"But if you are asking for advice, the government of India is a sovereign state, it has to find what is best for the people of India," he opined.