Economy

Trump asks India to withdraw tariff hike; calls it unacceptable

Reuters NEW DELHI | Updated on June 27, 2019 Published on June 27, 2019

US President Donald Trump speaks to members of the media.   -  Bloomberg

India imposed higher tariffs on 28 US products following US' withdrawal of key trade privileges under GSP

US President Donald Trump on Thursday demanded India withdraw retaliatory tariffs imposed by New Delhi this month, calling the duties “unacceptable” in a stern message that signals trade ties between the two countries are fast deteriorating.

India slapped higher duties on 28 US products after the United States withdrew tariff-free entry for certain Indian goods. Washington is also upset with New Delhi's plans to restrict cross-border data flows and impose stricter rules on e-commerce that hurt U.S. firms operating in India.

Read more: India imposes higher customs duty on 28 US products

“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,” Trump said on Twitter. “This is unacceptable and the tariffs must be withdrawn!” said Trump, who will meet Modi at this week's G20 summit in Japan.

Government sources rejected Trump's argument, saying Indian tariffs were not that high compared to other developing countries and US tariffs on some items were much higher. India's trade ministry did not immediately respond to a Reuters email seeking comment.

Trump's tweet came hours after US Secretary of State Mike Pompeo left New Delhi after meeting Modi. Pompeo had said the nations were “friends who can help each other all around the world” and the current differences were expressed “in the spirit of friendship”.

In one tweet, though, Trump may have badly undermined Pompeo's efforts to reduce friction between the two countries.

Related news: US ready to iron out trade row with India in a ‘friendly spirit’: Pompeo

Trump in May scrapped trade privileges for India under the Generalized System of Preferences (GSP), under which New Delhi was the biggest beneficiary that allowed duty-free exports of up to $5.6 billion. India initially issued an order in June last year to raise import taxes as high as 120 per cent on a slew of US items, incensed by Washington's refusal to exempt it from higher steel and aluminium tariffs.

Also read: Trump terminates preferential trade status for India under GSP

But New Delhi repeatedly delayed raising tariffs as the two nations engaged in trade talks. Trade between them was worth $142.1 billion in 2018, with India having a surplus of $24.2 billion. The relationship took a big hit with India's sudden introduction of new e-commerce rules for foreign investors in February.

That angered the United States which saw a protectionist New Delhi effort to help small traders at the expense of U.S. firms such as Walmart and Amazon.com Inc. Companies such as Mastercard and Visa have also been battling Indian central bank rules that mandate them to store their data only in India.

Published on June 27, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Sincerely,

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.