Trump Tariff Day: Countries Don’t Get What They Deserve, They Get What They Negotiate

As US President Donald Trump prepares to announce a fresh round of tariffs on Thursday, Jayant Krishna, Senior Fellow at the Centre for Strategic and International Studies, says India must brace for potential trade friction but remain firm in negotiations. 

“Countries don't get what they deserve, they get what they negotiate,” he told NDTV Profit, noting the delicate balance India must strike in protecting domestic industries while keeping trade discussions open.

Trump's so-called “Liberation Day” tariff announcement is expected to impose reciprocal duties on countries the US accuses of maintaining unfair trade barriers. India, which Trump has repeatedly called the “tariff king,” has been flagged for its high duties on American farm goods, with Washington citing import levies of up to 100% on products like walnuts, almonds, and coffee.

Jayant Krishna, Senior Fellow at the Centre for Strategic and International Studies

What Can India Do?

Krishna noted that while India may tweak certain tariffs, large-scale reductions on agricultural imports are unlikely. “A 10% hike in tariffs—if it happens—is something India can absorb by finding alternative opportunities. But anything more than that will be difficult,” he said. India currently imposes a 50% duty on apples and corn, 100% on coffee and walnuts, and 150% on whisky, among others.

He pointed out that India's agricultural policies, including subsidies for fertilisers, seeds, and electricity, are seen as unfair by the US but remain essential for marginal farmers. “These are non-tariff issues that India cannot easily address,” he said.

However, Krishna suggested that some sectors, such as information technology, metals, and motorcycles, could see import duty reductions. “There are indications that India has shown willingness to lower duties in these areas, but when it comes to agriculture and autos—where 40% of manufacturing GDP is tied up—it won't be easy to give in,” he explained.

US Needs to Consider Global Trade Fallout

Beyond the US-India trade dynamic, Krishna emphasised that Washington must weigh its broader global trade position. “The US has already antagonised China, Mexico, and the European Union. If India is treated in the same breath, the US stands to lose as well,” he warned.

India, he said, has already made some conciliatory moves, such as removing the 6% equalisation levy (commonly called the Google tax) to address US concerns over digital trade barriers. But if Trump's tariffs are too stringent, it could derail any progress toward a bilateral trade agreement or free trade pact. “If the US truly wants to reach $500 billion in trade with India by 2030, as both leaders once envisioned, it should avoid a hardline approach,” Krishna noted.

Potential Impact on Indian Exports

According to estimates, a 10% US tariff on Indian exports could result in a $6 billion hit, while a 20% levy could see losses soar to $31 billion. Key sectors at risk include seafood, pharmaceuticals, steel, gems and jewellery, and machinery.

Krishna cautioned that while trade tensions are inevitable, the goal should be to preserve negotiating space. “I hope Liberation Day does not turn into martyrdom day for Indian exports to the US,” he said.