India could be among the worst hit due to US President Donald Trump's latest reciprocal tariffs, even as the two countries agreed to begin negotiations to address trade deficit issues.
Trump, on Thursday, ordered his administration to consider imposing reciprocal tariffs on numerous trading partners, which could take effect from April this year. Reciprocal tariffs could affect nearly every country, with India, Japan, and the European Union being hit the most.
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This decision to impose reciprocal tariff, including India, came moments before he held a bilateral talk with his Indian counterpart Narendra Modi, where they announced a framework to strengthen both sides economically and vowed to deepen every aspect of the partnership.
Trump hailed Modi's decision to announce reductions in tariffs on certain high-duty goods from the US in the Union Budget, "which limits US access into the Indian markets very strongly".
Trump said his decision was forced after efforts to convince India to reduce import taxes had failed. “It's very hard to sell into India because they have trade barriers, very strong tariffs,” said Trump.
Both countries discussed measures to cut down the trade deficits, which now is almost $100 billion. "We want a level playing field, and we can easily make up that deficit with the sale of oil and gas," Trump said. He also said the US would take steps to ultimately provide India with sales of F-35 fighters.
Meanwhile, Modi said that both countries decided to take bilateral trade to $500 billion by 2030. While Trump's motto is 'Make America Great Again', India is moving towards the goal of 'Viksit Bharat 2047', he said.
From ensuring the return of undocumented Indian migrants to cutting import duties of key US goods in the Union Budget, Modi has shown that India is ready to engage with Trump.
On global reciprocal tariffs, Trump told reporters that he would enact import taxes on cars, semiconductors and pharmaceuticals “over and above” the reciprocal tariffs at a later date, Bloomberg News reported.
Trump singled out Japan and South Korea as countries that he believes are taking advantage of the US, and thus could be targeted in his latest push.
The US President has already imposed 10% tariffs on Chinese goods and plans to slap 25% duties on all US steel and aluminum imports next month.
Treasuries in Asia were trading flat in early trade, after a rally in the previous session. The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — was 0.2% down at 107.09.
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