[With its move, India is simply “returning the favor,” said Gautam Chikermane, a researcher on international and Indian economic policy at the Observer Research Foundation in New Delhi. But, he said, the move could hurt India’s economic growth as the country diversifies its exports, as well as prompt India “to re-look at U.S. relations as undependable.” That could push India closer to Southeast Asia and the European Union, further isolating the United States, he argued.]
By Annie Gowen
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A
worker grinds a steel pipe to be used in air ducts inside a workshop in an
industrial
area in Mumbai. (Francis Mascarenhas/Reuters)
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NEW
DELHI — India joined the
European Union and other U.S. trading partners in retaliating against the Trump
administration’s tariff hikes on steel and aluminum Thursday by raising import
duties on a variety of goods, including almonds, apples and some metal
products.
India had notified the World Trade
Organization on June 14 of its decision to increase tariffs on more than two
dozen goods from the United States. It is a $241 million measure that matches
the amount of steel and aluminum import duty expected to be collected from
India by the United States through the tariffs imposed by the Trump
administration earlier this year. More than a third of the figure comes from
almonds; India is the world’s biggest buyer of U.S.-grown almonds.
India finalized its decision during a week
when the global trade war escalated, with the United States enacting $50
billion in tariffs on Chinese goods and the European Union imposing $3 billion
in levies on such products as U.S.-made bourbon, peanut butter and
Harley-Davidson motorcycles. Trump has erroneously called out India for its
“100 percent” tariffs on Harleys; in fact India lowered its tariffs on high-end
motorcycles from a range of 60 to 75 percent to 50 percent. The new tariffs
will go into effect Aug. 4.
Economists noted that the amount of money
involved with India’s levies dwarfed in comparison with that of China —
U.S.-India trade was $126 billion last year, while U.S.-China trade was $635
billion — but that the gesture had important symbolism and could presage
further strain between the two friendly democracies at time when their
diplomats are working to deepen military ties.
With its move, India is simply “returning the
favor,” said Gautam Chikermane, a researcher on international and Indian
economic policy at the Observer Research Foundation in New Delhi. But, he said,
the move could hurt India’s economic growth as the country diversifies its
exports, as well as prompt India “to re-look at U.S. relations as
undependable.” That could push India closer to Southeast Asia and the European
Union, further isolating the United States, he argued.
The Office of the U.S. Trade Representative
said in April that the U.S. trade deficit with India had fallen to $23 billion
in 2017, a 6 percent decrease, as U.S. goods exported to India rose nearly $26
billion, up 18 percent from the previous year. China’s trade deficit with the
United States last year was $376 billion, by comparison.
India had sought to be exempt from the new
U.S. tariffs on steel and aluminum, arguing its exports were small in
comparison with other countries’, but got nowhere.
In a television interview Thursday, U.S.
Commerce Secretary Wilbur Ross defended the Trump administration’s decision to
impose tariffs, saying the actions are a defense against years of “bad
practice.”
“They’re screaming and yelling — they’ve been
spoiled for many, many years, and that game is over,” Ross told Bloomberg
Television. “We’re going to fix the problem of protectionism around the world,
and we’re going to fix it by making it more painful for those countries to do
bad practices than to do the right thing, which is to lower the trade barriers
and lower their tariffs.”
Trade representatives from India and the
United States are to meet in New Delhi next week. Indian-U.S. trade relations
are thorny even in the best of times, analysts say, with the United States
pushing for market access and voicing concerns over intellectual property
rights, while India wants protections for its citizens on foreign worker visas.
Experts say that the Trump administration has been focused on poultry and pork
imports as well as India’s imposition of price controls on medical devices.
Swati Gupta contributed to this report.
Correction: An earlier version of this story gave an incorrect value of $74
billion for U.S.-India trade last year. That figure referred to the trade of
goods between the nations, but overall bilateral trade totaled $126 billion.
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