In a significant address to a joint session of Congress, U.S. President Donald Trump targeted India's high import duties, particularly highlighting the country's 100% tariff on imported American automobiles.

Trump emphasised the need for "fair trade," asserting that India and other nations have long imposed excessive tariffs on American goods, which he believes have disadvantaged U.S. businesses. He announced that reciprocal tariffs will begin on April 2, aiming to level the playing field for American exporters by mirroring the tariffs imposed by other countries on U.S. goods.

Trump's speech underscored his "America First" approach, emphasizing that the U.S. will no longer tolerate what he perceives as unfair trade practices. He stated, "Whatever they tax us, we will tax them," signalling a firm stance on trade reciprocity.

The move could significantly impact India's trade with the U.S., potentially disrupting exports in key sectors such as pharmaceuticals, textiles, and IT services.

India is exploring ways to mitigate these effects by considering reductions in tariffs on various imports, including automobiles and chemicals, in hopes of negotiating a trade deal with the U.S. by the fall.

However, India's resistance to lowering tariffs on agricultural products could complicate negotiations, as it seeks to protect its domestic farmers.

Despite these efforts, the looming reciprocal tariffs pose significant challenges for India's trade relations with the U.S. and could have broader implications for global trade dynamics.

Agencies