President Trump, championing his ‘America First’ policy has been a vocal critic of India for levying “tremendously high” duties on US products, has described the country as a “tariff king”.
“When you look at the world tariff regime; 67 per cent of all the tariffs in the world disadvantage America. There’s a higher tariff on American products in the country in which we do business with. India is the worst,” Senator Lindsey Graham told CBS.
Graham, over the past several months has emerged as a close confidant of Trump on issues related to South Asia.
He was present when Trump held meeting with the visiting Pakistani Prime Minister Imran Khan at the White House last month.
Responding to a question, the Senator from South Carolina said he had introduced a bill in the Senate that allows the American President to charge a country the same as it does with the US while doing business.
“So, like in India… they have a 100 per cent tariff on a lot of our products. Either we increase tariffs on Indian products, or we all go to zero. The goal is to go to zero,” Graham said.
The Trump-Modi meeting assumes significance in the wake of the strain that has popped up in the bilateral relationship on a host of trade and economic issues.
Ahead of the meeting in France on the sidelines of the G-7 summit, the White House said that trade and tariffs would be important topics of discussion between the two leaders.
“They will look for solutions on the trade front. The US is looking to India to reduce tariffs and open its markets,” a senior administration official said, ahead of the meeting early this week.
Early this week, India’s Ambassador to the US Harsh Vardhan Shringla had met Graham at the US Capitol.
According to the Indian Embassy, they “discussed the immense potential for closer strategic and economic ties between the world’s oldest and largest democracies.”
India has raised tariffs on 28 items, including almond, pulses and walnut, exported from the US in retaliation to America’s withdrawal of preferential access for Indian products.
The Trump administration wants Prime Minister Modi to lower the trade barriers and embrace “fair and reciprocal” trade.
Trump has also criticised India’s high import tariff on the iconic Harley Davidson motorcycles as “unacceptable” though acknowledging that his “good friend” Prime Minister Modi has reduced it from 100 per cent to 50 per cent.
Last February, India slashed the customs duty on imported motorcycles like Harley-Davidson to 50 per cent after Trump called it “unfair” and threatened to increase the tariff on import of Indian bikes to the US.
The government on June 21 last year decided to impose these duties in retaliation to the US decision of significantly hiking customs duties on certain steel and aluminium products.
America, in March last year, imposed 25 per cent tariff on steel and a 10 per cent import duty on aluminium products.
As India is one of the major exporters of these items to the US, the move has revenue implication of about USD 240 million on domestic steel and aluminium products.
India has also dragged the US to the World Trade Organisation’s (WTO) dispute settlement mechanism over the imposition of import duties on steel and aluminium.
India exports steel and aluminium products worth about USD 1.5 billion to the US every year. India’s exports to the US in 2017-18 stood at USD 47.9 billion, while imports were at USD 26.7 billion. The trade balance is in favour of India.
The US and China have been locked in a bruising trade war since Trump imposed heavy tariffs on imported steel and aluminium items from China in March last year, a move that sparked fears of a global trade war.
In response, China imposed tit-for-tat tariffs on billions of dollars worth of American imports.