Trump accuses India of imposing tariffs on American products; says ‘no longer acceptable’

Trump’s comment came days after his meeting with Prime Minister Narendra Modi on the sidelines of the G20 Summit in Osaka on June 28, where the two leaders aired their concerns over bilateral trade disputes.

Updated - July 09, 2019 09:40 pm IST

Published - July 09, 2019 09:31 pm IST - Washington

President Donald Trump on Tuesday said India has long had a “field day” imposing tariffs on American products, which is “no longer acceptable” to the U.S.

Mr. Trump’s comment came days after his meeting with Prime Minister Narendra Modi on the sidelines of the G20 Summit in Osaka on June 28, where the two leaders aired their concerns over bilateral trade disputes and agreed for a meeting of their Commerce Ministers to sort out the issues.

“India has long had a field day putting tariffs on American products. No longer acceptable!” Trump tweeted on Tuesday.

Later this week, U.S. Commerce Secretary Wilbur Ross and Energy Secretary Rick Perry are scheduled to address a major India-centric conference in Washington D.C.

President Trump, championing his ‘America First’ policy, has been a vocal critic of India for levying “tremendously high” duties on U.S. products and has described the country as a “tariff king“. Though trade is an important part of the booming bilateral relationship, a row over market access and tariffs has escalated in recent months, leading to fears of a protracted dispute.

Before his meeting with Mr. Modi, Mr. Trump tweeted, “I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high tariffs against the United States, just recently increased the tariffs even further. This is unacceptable and the tariffs must be withdrawn!”

India has raised tariffs on 28 items, including almond, pulses and walnut exported from the U.S., in retaliation to America’s withdrawal of preferential access for Indian products. Mr. Trump has also criticised India’s high import tariff on the iconic Harley Davidson motorcycles as “unacceptable”.

President Trump terminated India’s designation as a beneficiary developing nation under the key Generalized System of Preference (GSP) trade programme from June 5, after determining that New Delhi had not assured the U.S. that it will provide “equitable and reasonable access” to its markets.

The GSP is the largest and oldest U.S. trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

The Trump administration wants India to lower the trade barriers and embrace “fair and reciprocal” trade.

Last February, India slashed the customs duty on imported motorcycles like Harley-Davidson to 50% after Mr. Trump called it “unfair” and threatened to increase the tariff on import of Indian bikes to the U.S.

The government on June 21 last year decided to impose these duties in retaliation to the U.S. decision to significantly hike customs duties on certain steel and aluminium products. America, in March last year, imposed 25% tariff on steel and a 10% import duty on aluminium products.

Many U.S. companies like Google, Mastercard, Visa and Amazon have raised concerns over the issue of data localisation and its impact on their operational cost.

In April last year, the Reserve Bank of India had issued a directive on the ‘Storage of Payment System Data’. It had advised all system providers to ensure that, within a period of six months, data relating to payment systems operated by them is stored in a system only in India for effective monitoring.

India has also dragged the U.S. to the World Trade Organisation’s dispute settlement mechanism over the imposition of import duties on steel and aluminium.

India’s exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.

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