US President Trump delivers a speech to a joint session of Congress.
Credit: Reuters Photo
New Delhi: The United States will impose reciprocal tariffs on India from April 2, President Donald Trump has announced just weeks after he and Prime Minister Narendra Modi agreed to restart negotiations for a trade deal and set an ambitious target to raise the annual two-way commerce to the level of $500 billion by 2030.
Trump criticised India as well as other nations, like China, Brazil, Mexico and Canada, for imposing high tariffs on exports from the US. “It's very unfair. India charges US auto tariffs higher than 100%,” he said while addressing the US Congress early on Wednesday (Indian Standard Time).
He made the comment even as New Delhi, shortly after his return to the White House on January 20, lowered tariffs on imports of bourbon whiskey, motorcycles, Information and Communication Technology products and metals from the US, as well as measures to enhance market access for the US agricultural products, like alfalfa hay and duck meat, and medical devices. He and Modi had, on February 14, also agreed that India would buy more weapons, oil and gas from the US to lessen the imbalance in bilateral commerce.
Commerce Minister Piyush Goyal is already in Washington D.C. to meet US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick in order to set the stage for starting the negotiation for the trade deal. Modi and Trump agreed that the two sides would try to conclude the negotiation for the first part of the deal by the end of this year.
“If you don’t make your product in America, however, under the Trump Administration, you will pay a tariff and, in some cases, a rather large one," Trump said in his first address to the US Congress.
“Other countries have used tariffs against us for decades, and now it’s our turn to start using them against those other countries. On average, the European Union, China, Brazil, India, Mexico and Canada — have you heard of them? And countless other nations charge us tremendously higher tariffs than we charge them,” the 47th US president said before reiterating his allegation about India imposing high tariffs on exports from the US, particularly on auto products.
“China's average tariff on our products is twice what we charge them. And South Korea's average tariff is four times higher. Think of that four times higher. And we give so much help militarily and in so many other ways to South Korea,” he added, announcing that the US would start imposing reciprocal tariffs on other countries from April 2. “Whatever they tariff us, other countries, we will tariff them. That’s reciprocal, back and forth. If they do non-monetary tariffs to keep us out of their market, then we will do non-monetary barriers to keep them out of our market.”
Trump had repeatedly accused India of imposing high tariffs on exports from the US during his first term in the White House. He has continued to do so during his campaign ahead of the presidential elections in 2024, calling India a “big abuser” in its trade relations with the US. He had even complained about India’s high tariffs hurting the US exporters hours before hosting Modi at the White House on February 13. “It’s very hard to sell into India because they have trade barriers, very strong tariffs,” he had said during a joint press conference with Modi at the White House.
The US goods imports from India totalled $87.4 billion in 2024 – 4.4% or $3.7 billion more than in 2023. India imported goods worth $41.75 billion from the US in 2024. India was the destination of 2.02% of exports in 2024. The US goods trade deficit with India was $45.6 billion in 2024, an increase of $2.3 billion (5.3%) over 2023.
The Trump Administration has already moved to implement a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Canada has retaliated with 25% tariffs on $30 billion in goods imported from the US, effective from March 4. Mexico would wait till Sunday before announcing reciprocal action. China announced that it would impose up to 15% additional tariffs on imports of key US agricultural products.