Donald Trump will take over the charge yet again in Washington DC. He has a unique style of doing and undoing things.
Trump has in the past too reoriented the US trade policy and now in his historic second term intends to pursue a specific direction.
Indian policy makers and the Union Commerce ministry have to work out sincerel taking all pros and cons into conisderation.
During his campaign, Trump in his illustrious style called tariffs the “most beautiful word” in English — after only “faith” and “love”— and pledged to impose 60 per cent tariffs on Chinese imports and 20 per cent on all others. But post-election results and now that he is the President-designate he has come out with a new salvo.
With BRICS countries being at the receiving end of the President-elect's tariff threats, there are reasons to argue that India must prepare for fresh challenges
Trump has actually consistently opposed free trade agreements that he believed undermined American economic interests while benefiting both allies and adversaries
Thus the new 'threat' to impose 100 per cent tariffs on imports from BRICS nations —if they create an alternative to the US dollar — highlights a powerful new impulse.
The fact of the matter is Trump also has a broader ambition to overhaul the global economic order using tariffs as their primary tool.
Now how to work on !! ???
The Modi Govt could in fact request reductions to increase market access for its goods in America.
For its part, the US may seeks lower customs duties for its products. Thus the refrain goes India must prepare for fundamental changes in international trading.
Of course, there are no issues in the US-India relationship that would lead to discriminatory tariffs against India. But it is also a fact that Trump has in the past referred to India as an "abuser" of import tariffs, a claim that echoed his October 2020 statement labelling India as the "Tariff King."
Experts like C Raja Mohan says Trump's trademark aggressive stance essentially tells the BRICS countries, “Don’t even think about it.” Sceptics have long maintained that BRICS’ rhetoric about de-dollarisation exceeds its actual financial capabilities and their commitment to collective action.
The BRICS nations lack unity to reduce the dollar’s dominance.
The new call is essentially a Sino-Russian endeavour and rhetoric.
New Delhi is quite practical these days and hence there is quick realisation that America is India’s most important technological and economoic partner along with other robust ties such as in the defence sector.
It is also vital to note that BRICS neither had nor is likely to gain the ability to restructure the global economic order.
But it is also a truism that US does have the financial clout for necessary muscle flexing.
The US was India’s largest trading partner in 2023-24, with India’s exports at $77.51 billion and imports at $42.2 billion. Commerce and Industry Minister Piyush Goyal recently stated that the US President is a "friend of India" and that India-US relations will continue to strengthen.
Trade relations between India and the US will likely continue to grow, regardless of the change in US leadership. According to the commerce ministry, India’s exports to the US increased to $39.2 billion in October 2023, compared to $21.46 billion in October 2015. Between 2001 and 2023, India’s exports to the US grew at a compounded annual growth rate (CAGR) of 10.48 per cent, while US imports from the world grew by 4.76 per cent.
All said, it has to be kept in mind that Trump's post-election cabinet appointments confirm his commitment to wielding tariffs as a key policy push.
Scott Bessent, his Treasury Secretary nominee, recently already stated how tariffs can achieve various objectives.
ends
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