New Delhi, : US President Donald Trump did not name India in the first set of tariffs announced on Friday, which included 25 percent tariffs on Mexico and Canada, and 10 percent on China, citing a “high trade deficit,” reported. The new measures, effective from February 1, focus on the countries contributing most to the US trade deficit. China, Mexico, and Canada are the top contributors of US trade deficit, with China at 30.2 per cent, Mexico at 19 per cent, and Canada at 14 per cent, while India, contributing just 3.2 per cent is the ninth-largest contributor, according to the Research and Information System (RIS), the report added. “We have big deficits with all three of them. And in one case, they’re sending massive amounts of fentanyl, killing hundreds of thousands of people a year with fentanyl. And in the other two cases, they’re making it possible for this poison to get in. We have about a $200 billion deficit with Canada… and a $250 billion trade deficit with Mexico,”
Trump said during a press briefing. According to the Economic Survey released on Friday, India’s import tariff policy has progressed over time, effectively balancing domestic objectives with the need for global economic integration. “Tariffs vary by sector, with considerations such as protecting sensitive sectors from foreign competition and permitting access to
important raw materials and intermediate goods. India has ensured that tariff policies comply with WTO rules and regulations. Over time, several efforts have been made to rationalise tariffs further and address the inverted duty structures,” the survey said. In its report on January 17, the Peterson Institute for International Economics warned that a 10 percent tariff imposed by the US on China, followed by a Chinese retaliation, would result in a $55 billion reduction in US GDP over four years, and a $128 billion loss for China. “Inflation would increase by 20 basis points in the US, and after an initial dip, by 30 basis points in China. The initial fall in inflation in China is caused by a temporary tightening of Chinese
monetary policy aimed at offsetting the depreciation of the Chinese currency,” the report stated. In December, NITI
Aayog CEO BVR Subrahmanyam had said that trade policies under US President-elect Donald Trump could lead to a potential economic boom for India, driven by major trade diversions in global trade, the report added.
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