India plans tariffs on American commodities

5 comments

1. SS: India may slap tariff countermeasures on select American commodities, a retaliation to Washington’s move to impose a steep 50% duty in June on steel, aluminium and their derivatives from India, people aware of the matter have said.

   To be sure, the levies on steel and aluminium have played out as a parallel trade dispute at the World Trade Organization, but its timing would make it the first Indian retaliation since Trump’s July 31 announcement of the 25% tariff on all Indian goods entering the US when trade talks failed to reach a breakthrough and his subsequent penalties over Russian oil purchases announced on August 6.

   The steel and aluminium dispute dates back to February when the Trump administration imposed 25% tariffs on the metals, later doubling them to 50% in June. New Delhi intimated the WTO about the dispute and India’s rights to take proportionate action on May 9 after at least $7.6 billion worth of Indian exports to the US were affected by the duties.

   According to one of the people cited above, what has affected the retaliation calculus was Trump’s comments on Thursday, when he rejected stepping up trade negotiations with India. “No, not until we get it resolved,” the president said at the Oval Office when asked about increased trade talks.

2. If true, India really needs to tread carefully. The reality is they rely so much more on the US than vice versa. Trump has a huge array for non tarrif options to retaliate, not only is the US Indias biggest export market,  but of the $138 billion India receives in remittances a year –  28% of this comes from the US
   https://m.rbi.org.in//scripts/BS_ViewBulletin.aspx?Id=23260#T1 .  India also desperately lobbies for H1Bs from the US, and the US provides millions of Indian’s offshore jobs (which the US could probably remove now at a faster timeline with AI), and finally, India needs the US military to defend against China at sea and at home. The Pakistan/India conflict proved China’s jets, which are copies of US jets are second only to US jets in the world which means they need US jets.  China also copied everything of value from Russia’s military and already and provides these to Pakistan, and finally, in any real conflict with China, Russia would side with China 9+ times out of 10.

   Ultimately, these tarrifs provide Modi a political excuse to make reforms India has needed for decades, but he sadly seems like he doesn’t want to risk giving up power for the good of India but rather wants copy Xi and Putin and be a ruler for life. Evidence of this is seen in the plummeting press rankings under his rule: https://www.cnn.com/2024/05/22/media/india-elections-press-freedom-decline-intl-hnk . It’s also seen in his divide and conquer playbook – the same easy playbook used by the mughals and the British (which is how a relative tiny island halfway across the world was able to rule India for centuries)

   Example of needed reforms: India is one of the most densely populated countries In the world in terms of arable farmland to people, and yet their farms are also one of the most inefficient. The British basically built their irrigation system during the British raj (admittedly for selfish reasons) but that same system hasn’t changed much. So much of India’s farms are at the whim of the monsoon season where thousands die or commit suicide because of a consistent yet unpredictable weather phenemom (Florida has hurricanes – yet you never here about this in America). 

    

3. Now this is what I like to see.

4. India can’t really do any significant damage to American economy as it does not produce anything that America needs that it can’t get from another country. Not like China with their rare earths…

5. We don’t export much to India…

   This is cutting noses to spite faces

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