Former U.S. President Donald Trump, running for a second term, has reiterated his criticism of India’s high tariffs on foreign goods, particularly citing the example of Harley Davidson motorcycles. Speaking at the Detroit Economic Club, Trump vowed to impose a “reciprocal tax” on countries like India if he wins the upcoming election.
Trump Criticizes India’s Tariffs
Trump emphasized the need for reciprocity in trade policies, stating, “Perhaps the most important element of my plan to make America extraordinarily wealthy again is reciprocity.” He accused India of imposing some of the highest tariffs globally, calling the country the “biggest charger” of tariffs. Trump specifically referred to his long-standing grievance over India’s import taxes on Harley Davidson motorcycles, which reportedly reached as high as 150%.
“I said how’s business? Good, good. What are the bad countries? Well, India is very tough… Tariffs. I said what are they? And they said like 150 per cent, some massive amount,” Trump explained, recounting his conversations with American companies like Harley-Davidson during his first term in office.
Trump Softens Tone with Praise for PM Modi
Despite his criticism of India’s trade practices, Trump praised Prime Minister Narendra Modi. “We have a great relationship with India… especially the leader, Modi. He’s a great leader. Great man,” Trump said. He added that while India’s tariffs are high, they impose them with “a smile,” acknowledging India’s diplomatic approach to trade.
Trump’s admiration for Modi is consistent with his previous remarks, where he described the Indian leader as “the nicest human being” and a friend. He recalled how before Modi’s tenure, Indian leadership was unstable, but Modi had brought stability and progress to the country.
Previous Trade Disputes
Trump’s focus on India’s tariffs isn’t new. In 2019, during his first term, Trump revoked India’s designation as a developing nation, which had previously allowed India to export numerous goods to the U.S. duty-free. In response, New Delhi raised tariffs on several U.S. products. Despite these tensions, India and the U.S. maintained a strong trade relationship, with bilateral trade reaching approximately $127 billion in 2022, making the U.S. India’s largest trading partner.
Potential Impact of Trump’s Reciprocal Tax
Economic experts have speculated on the possible outcomes of Trump’s proposed trade policies. According to Bloomberg Economics, if Trump enacts a 60% tariff on Chinese goods and a 20% tariff on others, including India, it could lead to a slight decline in India’s economy, reducing its GDP by 0.1% by 2028. The report attributes this to reduced global trade and India’s competitive limitations.
Economists have suggested that India could counter these effects by increasing manufacturing subsidies and reducing import tariffs. By offering a 4% production incentive and cutting import tariffs by 1 percentage point, India’s GDP could potentially grow by 0.5% beyond current projections.
Continued Admiration for Modi
Trump’s comments come on the heels of recent praise for Prime Minister Modi, whom he described as “a friend” and “the nicest human being.” Trump acknowledged Modi’s leadership in bringing stability to India, stating, “Before him, they were replacing them every year. It’s very unstable… He’s a total killer,” referring to Modi’s effectiveness as a leader.
In conclusion, while Trump remains critical of India’s trade policies, particularly its high tariffs, he continues to hold a strong personal admiration for PM Modi, highlighting the complexity of the U.S.-India relationship under his potential future presidency.
