Trump's Tariff Claim Against India Unfair, Says US Think Tank

Strategic Insights -

A recent claim by former American President Donald Trump that India is an "abuser" of import tariffs has been disputed by a US think tank. The Global Trade Research Initiative (GTRI) argues that Trump's argument is unfair as many countries, including the US, protect their domestic industries by imposing high customs duties on certain products. According to GTRI, the US imposes high duties on items like dairy products, fruits and vegetables, and minerals and metals.

Key Takeaways:

  • The GTRI report highlights that the US imposes high duties on various products, including dairy products (188%), fruits and vegetables (132%), cereals and food preparations (193%), and minerals and metals (187%).
  • The average tariff rate of India (17%) is higher than the US (3.3%), but similar to other major economies like South Korea (13.4%) and China (7.5%).
  • India has demonstrated its openness to free trade by removing customs duties for imports from FTA partners like Association of South East Asian Nations, Japan, and South Korea.
  • The US think tank suggests that the US should consider negotiating a free trade agreement with India to achieve zero tariff access if it is keen on reducing tariffs.
  • Tariff calculations can be complex, and average and trade-weighted tariffs better represent a country's tariff profile.
  • India's tariff structure is diverse, with high tariffs imposed on certain products like wine (150%), while others have lower tariffs like beverages and tobacco (150%).

Statistics:

  • The highest tariff levied by Japan is 457%, followed by Korea (887%), the US (350%), and India (150%).
  • The US imposes high duties on various products, including:

+ Dairy products: 188%

+ Fruits and vegetables: 132%

+ Cereals and food preparations: 193%

+ Oilseeds, fats and oils: 164%

+ Beverages and tobacco: 150%

+ Minerals and metals: 187%

  • India's average tariff rate is 17%, while the US' average tariff rate is 3.3%.
  • The average tariff rate of South Korea is 13.4%, and China's is 7.5%.

Sources:

  • Global Trade Research Initiative (GTRI)
  • Times of India