From the Viewsroom

Trump’s trade wars

Paran Balakrishnan | Updated on March 04, 2018 Published on March 04, 2018

Cry foul all you like, but India’s guilty of tariff games too

If it’s steel and aluminium today, can Indian motorcycles be far behind? President Donald Trump was railing against global trade long before the presidency was even a glimmer in the deepest recesses of his mind. In his eyes, the US has been getting the worst of every trade deal, from Nafta with allies Canada and Mexico to the Trans-Pacific Partnership though oddly the White House just days ago floated rejoining that pact which it exited a year ago. Trump, once he went on the election stump, also promised he’d take aim at China, which he branded the greatest “currency manipulator” and violator of trade rules. Perhaps, though, it’s no coincidence his strongest anti-trade moves have come after a week when he has been more besieged than usual. But surprise, surprise, his moves to raise tariffs on steel and aluminium won’t hurt China but Canada and Europe which are the largest exporters of steel to the US.

The Chinese are, of course, the key culprits who’ve been producing mountains of steel in the last decade — in 2017 their blast furnaces turned out an enormous 800mmt. Japan produces 104mmt and India comes third at 10mmt. Hardly surprising, then, that Chinese steel has flooded world markets and kept prices subdued. But India can hardly complain about Trump’s move to slap tariffs on steel. We’ve enforced anti-dumping duties on steel from six countries including China, Japan and South Korea for nearly two years. Engineering firms argue the Government is selling them out while protecting giant steel manufacturers. Indians may experience a certain schadenfreude watching Trump slap duties on other countries’ products. But let’s not forget he recently singled out India’s duties on Harley Davidson motorcycles for special mention. Could it be that Trump will step up the global trade wars and that his attention will turn, sooner rather than later, to pushing Indian motorcycles off American roads?

Paran Balakrishnan Editorial Consultant

Published on March 04, 2018
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