As the deadline for tariffs neared, US President Donald Trump imposed the threatened tariff of 25 per cent on India starting Friday as the prolonged negotiations appeared to have stalled.
His executive order, issued late Thursday, did not include penalty tariffs on buying Russian energy or for BRICS membership, which he had also threatened.
When Trump initially threatened the 25 per cent tariff, India said it “will take all steps necessary to secure our national interest”.
In the order setting the tariff rates for various countries, he claimed he was acting because “large and persistent annual US goods trade deficits constitute an unusual and extraordinary threat to the national security and economy of the United States”.
The 25 per cent tariff for India was higher than the rate ranging between 15 per cent and 19 per cent he imposed on most countries listed in the order.
While India was one of the first countries to start negotiations with the US, the talks appeared to have foundered, and Trump made the threat of 25 per cent on Wednesday, but later that day, he held out a ray of hope, saying, “We’re talking to India now, we’ll see what happens”.
He also did not issue a formal letter to India as he had to other countries.
But it appears that last-minute negotiations did not lower the tariffs.
While the negotiations were taking place, Trump repeatedly called Prime Minister Narendra Modi and India his friends.
As recently as last week, he said that a deal was imminent.
A major hurdle for India was the US’ insistence on opening the floodgates to US agriculture and dairy. That could have serious consequences for India’s agricultural sector, which employs nearly half the country’s working population.
India’s statement responding to Trump’s threat alluded to this factor, saying, “The government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs (Micro, Small, and Medium Enterprises)”.
(IANS)
