‘Free trade should be fair too’

March 02, 2017 12:00 am | Updated 03:38 am IST

Trump cites Indian duty of 100% on motorcycles, demands reduction in it

In an indication that increased market access for American companies will be a key priority in his engagement with New Delhi, U.S. President Donald Trump mentioned the 100% duty that India imposes on high-end motorcycles as a case of unfair trade practice and vowed to change it, in his first address to Congress.

Mr. Trump did not take India’s name, but India is the only major country that has a 100% customs duty on motorcycles. American company Harley-Davidson has been seeking a duty reduction for several years now. Recalling his meeting with the company’s executives on February 2, Mr. Trump said: “They said that in one case another country taxed their motorcycles at 100%. They weren’t even asking for change. But I am... I believe strongly in free trade but it also has to be fair trade.”

Cites Lincoln

Citing Abraham Lincoln to declare that he would purse an openly protectionist and nationalist policy that favours American companies, workers and soldiers, the President said: “My job is not to represent the world. My job is to represent the United States of America.” Mr. Trump said American companies were facing trade barriers across the world.

His statement sets the tone for Indian Foreign Secretary S. Jaishankar’s meetings with several U.S. interlocutors this week in Washington. U.S. officials, who did not want to be named, told The Hindu the Trump administration is likely to press India on trade matters. India is moving up in the list of U.S. trade partners and this has added a new urgency to the question of market access, according to these sources.

According to data for 2016 released recently, India is the ninth biggest trading partner of the U.S.

The Trump administration will be less concerned about balancing trade issues with strategic concerns, according to Richard Rossow, Wadhwani Chair in U.S.-India Policy Studies at the Centre for Strategic and International Studies, Washington. “For India, that means that sectors with price controls, high customs duties, or compulsory local manufacturing rules may increasingly be on the radar screen. Pressing India to liberalise FDI caps, which could result in manufacturing relocation, will get less attention,” he said.

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