Trump announces tariffs on Canada, Mexico, China: Should India be worried? | India News
NEW DELHI: US President-elect Donald Trump, on Tuesday vowed to reintroduce sweeping tariffs on Canada, Mexico, and China as one of his first executive orders, when he takes oath on January 26. Announcing this on his Truth Social platform, Trump outlined a 25% tariff on all goods entering the US from Canada and Mexico, and an additional 10% levy on Chinese imports. He framed these measures as critical to combating illegal immigration and the drug trade.
“Thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before,” Trump claimed. He labelled the border situation an “invasion” and insisted these tariffs would stay until the alleged crises were resolved. While the rhetoric echoed his first term, Trump’s second bid for tariffs promises a broader economic impact, potentially raising consumer prices in the US on everything from cars to groceries.
After Trump’s announcement, benchmark indices Sensex and Nifty ended their two-day rally and closed lower on Tuesday, mirroring weak global market trends amid concerns over tariff threats by the US President-elect. Global markets also reacted to sharply to Trump’s announcement, the Mexican peso fell sharply, while the Canadian dollar and Asian stocks also declined. Japan’s Nikkei dropped 1.4%, and Australia’s dollar weakened.
Also read: Tariffs and tension to trump trade
Should India be worried?
Trump who has described Prime Minister Narendra Modi as “a friend of mine” and had visited in India during his first presidency has frequently criticised India’s trade policies, calling India a “tariff king” and accusing it of imposing excessive duties on US goods.
“India is a very big charger. We have a great relationship with India. I did. And especially the leader, Modi. He’s a great leader. Great man. Really is a great man. He’s brought it together. He’s done a great job. But they probably charge as much,” Trump had said during a rally before his re-election.
The imposition of higher tariffs on Indian steel and aluminium during that his first term led to retaliatory Indian duties on American products like almonds and apples. Trade experts believe similar tensions could resurface if Trump’s policies take aim at India again.
Also read: Experts warn of higher tariffs on Indian goods under Trump’s ‘America First’ policy
Ajay Srivastava of the Global Trade Research Initiative had earlier warned that sectors like automobiles, textiles, and pharmaceuticals could face higher tariffs under Trump’s proposed “reciprocal trade” policy.
“His America First agenda would likely push for protective measures, such as reciprocal tariffs on Indian goods, potentially adding barriers for key Indian exports like automobiles, wines, textiles, and pharmaceuticals,” Srivastava explained had explained.
However, there is a potential silver lining. Trump’s primary focus remains on China, whose trade volume with the US far exceeds India’s. Should Trump impose harsher tariffs on China, Indian businesses could fill the gap in sectors like textiles and manufacturing, provided they have the capacity to scale production. “If Trump increases tariffs on India by a lower magnitude than on China, India could benefit,” Jayant Dasgupta, former Indian ambassador to the WTO had told TOI.
