India is among the 16 target countries in a review of trade ties that President Donald Trump was scheduled to order on Friday. The President would also sign a second order to strictly enforce anti-dumping and countervailing duties, U.S Commerce Secretary Wilbur Ross said on Thursday.
A “country-by-country, product-by-product” report would be prepared in 90 days that would form the basis of further measures that the Trump administration would take to reduce the country’s trade deficits. The report will identify “every form of trade abuse and every non-reciprocal practice that now contributes to the U.S. trade deficit,” Mr. Ross said.
India is the 9th biggest trading partner of the U.S and India had a trade surplus of around $26 billion with the U.S, in goods trade alone last year. The numbers on trade in services for last year has not been released yet. Of its top 20 trading partners, the U.S has a surplus with only five. With China, the U.S had a deficit of $ 347 billion in 2016.
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The review will be to assess whether deficits are being caused by cheating, specific trade agreements, lax enforcement or World Trade Organization rules. "It will demonstrate the administration's intention not to hip-shoot, not to do anything casual, not to do anything abruptly, but to take a very measured and analytical approach, both to analysing the problem and therefore to developing the solutions for it,” Mr. Ross said.
China, Japan, Germany, Mexico, Ireland, Vietnam, Italy, South Korea, India, Malaysia, Thailand, France, Switzerland, Taiwan, Indonesia and Canada were countries named in the briefing by Mr. Ross and Peter Navarro, the director of the White House National Trade Council.
Mr. Navarro has been a long time critic of China, but on Thursday, he insisted the presidential executive orders were not exclusive to China and was not linked to the scheduled visit of Chinese President Xi Jinping next week. “Nothing we're saying tonight is about China. Let's not make this a China story. This is a story about trade abuses, this is a story about an under-collection of duties.”
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Mr. Trump has named China, Mexico and Japan have repeatedly, for allegedly unfair trade practices. He has never named India, but it the 100 percent duty that India imposes on high power motorcycles was mentioned in his first speech the U.S Congress recently. Mr. Trump has also mentioned the abuse of H-1B visa programme earlier.
The trade review will touch upon a litany of American peeves about trade ties with India – inadequate protection of intellectual property, state subsidies and tariff and non-tariff barriers to trade.
“India and the U.S. must trade more in energy, generic pharma and defence if the intention is to bring down trade deficit. Also, the U.S. must be open to movement of service professionals to the U.S.,” said Didar Singh, Secretary General, FICCI.
Ahead of the President signing the executive orders, the U.S Trade Representative on Friday morning released its annual National Trade Estimate Report on Foreign Trade Barriers that highlights foreign barriers to U.S. exports.
The 20-page long chapter on India lists a range of trade restrictions by India such as an existing ban on animal-tested cosmetics and restrictions on dairy products and alcohol. It also accuses India of being opaque in its non-tariff regulations, and lists export subsidy programmes in several sectors as a matter of concern.