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Incoming US president Donald Trump threatened to impose reciprocal tariffs on India as he reiterated his longstanding complaints of New Delhi charging high tariffs.
Mr Trump made the comment at a news conference at Mar-a-Lago, standing alongside his commerce secretary pick Howard Lutnick.
The former president, who has threatened tariffs on several countries as part of his “America First” approach, ended preferential trade status for India during his first term in 2019.
India faced a bitter tariff war under the first Trump administration that affected the trade ties on both sides even as prime minister Narendra Modi and Mr Trump enjoyed close ties.
Forget about the word tariff for a second, Mr Trump said, adding that: “If they tax us, we tax them the same amount. They tax us. We tax them. And they tax us almost in all cases and we haven’t been taxing them.”
“The word reciprocal is important because if somebody charges us – India, we don’t have to talk about our own – if India charges us 100 per cent, do we charge them nothing for the same?” he said.
“India charges a lot. Brazil charges a lot. If they want to charge us, that’s fine, but we’re going to charge them the same thing,” he said.
Relations between India and China have gained momentum over the past two decades as Washington’s tensions with China soared over the years. The ties further improved during the Biden administration as Washington viewed India as a strategic partner in counterbalancing China’s rise in the Indo-Pacific.
However, analysts have said the India-US ties under Trump’s second administration will have to pass the test of a looming tariff war.
Following his election win, Mr Trump threatened to slap 100 per cent tariff on the Brics countries – Brazil, Russia, India, China, and South Africa – if they tried to replace the dollar for international trade.
“We require a commitment from these countries that they will neither create a new Brics Currency, nor back any other currency to replace the mighty US Dollar or, they will face 100 per cent tariffs, and should expect to say goodbye to selling into the wonderful US economy,” Mr Trump said on Truth Social on 30 November.
Indian foreign minister Subrahmanyam Jaishankar in December said India is not nervous about working with Mr Trump.
“India is in a much more advantageous position than many other countries to build deeper relations with the incoming Donald Trump 2.0 administration in the US. Some countries are looking at Trump 2.0 as a political challenge, we are not,” Mr Jaishankar said.
The bonhomie between Mr Modi and Mr Trump between 2017 to 2021 saw the two leaders exchanging words of praise.
In 2019, Mr Trump welcomed Mr Modi for the “Howdy, Modi!” event in Houston and described him as an “exceptional” leader. The Indian-American community event was attended by more than 50,000 people and garnered praise for one of the largest receptions of a foreign leader in the US.
It was followed by Mr Trump’s grand welcome to India when he was welcomed for a “Namaste Trump” event in Ahmedabad and Mr Modi hailed their “deep personal friendship”. The first state visit by Mr Trump to Gujarat state saw 125,000 people converging at the world’s biggest cricket stadium.
From 5 June, Mr Trump scrapped trade privileges under the Generalized System of Preferences (GSP) for India, the biggest beneficiary of a scheme that allowed duty-free exports of up to $5.6 billion.
In 2019, India imposed higher retaliatory tariffs on 28 US products including almonds, apples and walnuts. It was after the Trump administration scrapped trade privileges under the Generalized System of Preferences (GSP) for India, the biggest beneficiary of a scheme that allowed duty-free exports of up to $5.6bn.
However, the US is India’s top export destination, with goods and services exports of $120bn in 2023.
