Amid looming threat of reciprocal tariffs, officials from India's Commerce Ministry have said that India's trade situation is not comparable with that of Mexico, Canada, or China — the three countries that were the first targets of US President Donald Trump's tariff actions.
The US has the highest trade deficit with China, followed by Mexico and Vietnam. Tariffs on Mexico and Canada came into force on March 6, with the White House blaming the threat from illegal immigration and drugs, for the measures.
While imports from Mexico are rising, exports have not seen change as much. As such, the trade deficit with Mexico rose to $162 billion, according to data from the Bureau of Economic Analysis. In 2023, exports to Mexico accounted for 12% of total US exports, and imports from Mexico accounted for 13.7% of total US imports.
(Source: Trupti Pawaskar/NDTV Profit)
(Source: Trupti Pawaskar/NDTV Profit)
Exports were led by industrial supplies and materials, which accounted for 34.4% of US exports to Mexico, and imports were led by automotive vehicles, parts, and engines, which accounted for 32.8% of US imports from Mexico.
(Source: Prithwish Panda/NDTV Profit)
(Source: Prithwish Panda/NDTV Profit)
The deficit with Canada was about $40.6 billion in 2023. Exports to Canada accounted for 14.4% of total US exports, and imports from Canada accounted for 12.5% of total US imports.
(Source: Prithwish Panda/NDTV Profit)
(Source: Prithwish Panda/NDTV Profit)
Exports were led by industrial supplies and materials, which accounted for 23.9% of US exports to Canada, and imports were led by industrial supplies and materials, which accounted for 45.6% of US imports from Canada.
(Source: Prithwish Panda/NDTV Profit)
(Source: Prithwish Panda/NDTV Profit)
For the same year, exports to India accounted for just 2.4% of total US exports, and imports from India accounted for 3.1% of total US imports.
(Source: Trupti Pawaskar/NDTV Profit)
(Source: Trupti Pawaskar/NDTV Profit)
Exports were led by industrial supplies and materials, which accounted for 28.3% of US exports to India, and imports were led by consumer goods except food and automotive, which accounted for 34.3% of US imports from India.
(Source: Prithwish Panda/NDTV Profit)
(Source: Prithwish Panda/NDTV Profit)
In Asia, China is at the centre of Trump’s 'America First' trade policy. But, the rest of Asia, including India, is also at risk, as Trump tariffs are centered around trade imbalances, reciprocal and sectoral tariffs, as well as potential punitive measures on third countries that are used for tariff circumvention, Nomura said.
India has higher relative tariff rates on US exports, especially in agriculture and transportation. However, agricultural does not feature among India’s top exports to US. Some of the products on which tariffs may be imposed include electronics, automobiles, gems and jewellery, textiles, chemicals and seafood exports, according to Teresa John, economist at Nirmal Bang Institutional Equities. At worst, about 30% or about $25 billion of India’s merchandise exports to US may be impacted, she estimates.
However, India continues to take measures to mitigate the impact of tariffs through active engagement with US, pre-emptive reduction of tariffs in the last budget on select commodities, and commitments to increase defence and oil purchases. A potential India-US trade deal may eventually iron out some of the issues around tariffs and market access on both sides, John said.
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