Former US President Donald Trump on Tuesday (September 17) referred to India as a “very big abuser” in terms of import tariffs. The statement has come just days before Prime Minister Narendra Modi's visit to the United States between September 21 and September 23. Speaking on the subject of trade and tariffs during a town hall in Flint, Michigan, Trump said, “So when India, which is a very big abuser… These people are the sharpest people. They’re not a little bit backwards… You know the expression, they’re at the top of their game, and they use it against us. But India is very tough. Brazil is very tough…. China is the toughest of all, but we were taking care of China with the tariffs.” This is not the first time that Trump has taken a potshot at India’s tariff structure. The former president has repeatedly claimed that India is a “tariff king” and imposes “tremendously high” tariffs on American products. Here is a look at why Trump has been saying this. Why does Trump have a problem with India’s tariff structure? In April 2019, Trump alleged that India is one of the highest-taxing nations in the world. He also claimed that the country at the time was imposing “100 per cent” tariffs on American products, including the iconic Harley-Davidson motorcycles. The remarks came while Trump spoke at the National Republican Congressional Committee Annual Spring Dinner. He said, “I got a call from Prime Minister Modi of India. They are one of the highest-taxing nations in the world. They taxed us 100 per cent… They charge us 100 per cent tariffs on goods. So they send a motorcycle–and they make a lot of them–Indian cycles. They send them to our country, we charge them nothing. We send a Harley Davidson to India and they charge us 100 per cent.” To counter India’s “unfair” tariffs, Trump has proposed to introduce reciprocal taxes if he were to come to power in 2024. Last year, in an interview with Fox Business News, Trump said, “If India is charging us too, so what I want to have is a — call it retribution. You could call it whatever you want. If they are charging us, we charge them.” Are India’s tariffs high compared to other countries? India indeed has one of the highest tariff regimes globally. Currently, India’s average tariff rate stands at around 17%, which is significantly higher than that of Japan, the US, and the EU — all of them have rates somewhere between 3% and 5%. However, when compared to emerging economies, India’s tariffs are not that high. For instance, Brazil’s average tariff rate is around 13% and South Korea’s is 13.4% Speaking to the Press Trust of India (PTI), Ajay Srivastava, founder of the think tank Global Trade Research Initiative (GTRI), said, “While it is true that India imposes high duties on select products, Trump's argument overlooks essential context, making his accusations unfair.” He also said many nations protect domestic industries by imposing significant tariffs on certain items, according to a report by PTI. If the US is keen on zero tariff access into the Indian market, it should consider negotiating a free trade agreement with India, Srivastava added. “While India needs serious tariff reforms, the label of 'Tariff King' does not hold up when compared to the tariff practices of the USA and other major economies.”
