India should be “on guard” and be ready to open dialogue with the US, trade experts said, commenting on president Donald Trump’s renewed threat to impose “100% duties” on imports from the BRICS countries, if the nine-country bloc went ahead with its perceived plan to “de-dollarise” their foreign trade.
“India must be wary as whatever Trump has said directly impacts India. We should be opening up dialogue with the US to address some of the concerns they might have,” acting president and distinguished professor at Council for Social Development Biswajit Dhar said.
On his first day in office, Trump talked of putting “universal tariffs” on anybody exporting to the US.
However, he did not comment on the tariffs that he might impose on China, which he had threatened with 60% tariffs, or India, which he had once called a “tariff king.” Trump, however, announced imposition of 25% import duties on products from neighbouring Mexico and Canada from February 1.
Co-founder of Global Trade Research Initiative Ajay Srivastava said that when talks happen with the US regarding tariffs on goods, India must point out the trade in digital services and defence purchases for striking a balance in trade. “India is the biggest market for companies like Google and Meta as they are barred from China. These countries make a lot of money here so this should also be part of the equation,” he added.
Srivastava said while Trump is yet to spell out the specific regarding duties on India, New Delhi should be ready to retaliate in equal measure. In 2018 when the earlier Trump 1.0 imposed additional duties on steel and aluminium, India retaliated by putting the same amount of duty on products from the US like almonds, apples, chemicals and some items of steel.
On immigration Trump backtracked a bit and said the US needs people as a lot of companies will be locating themselves in the country to avoid tariffs. “If you do not want tariffs you should build in the US, we will have a lot of workers coming in but we will have legal immigration,” Srivasatava said.
“We are thinking in terms of 25% (tariff) on Mexico and Canada because they are allowing a large number of people to come in and fentanyl to come in,” Trump said while signing the first set of executive orders after taking oath of office. The orders deal with energy security, putting an end to illegal immigration and drug-related trade.
On universal tariffs, the president admitted that the administration is not ready with that now. “We put a universal tariff on anybody doing business with the US because they are coming in stealing our wealth, our jobs and our companies. They are hurting our companies.”
In his interaction with the media he was harsh with BRICS and what he called their attempts at de-dollarization of trade. BRICS includes Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates as members.
In their interactions, the BRICS leaders including Indian Prime Minister Narendra Modi have expressed interest in settlement of trade within the members in national currencies and smooth cross border patent systems.
While India has not supported a separate BRICS currency, other members of the group like Brazil, Russia and China have talked of it.
“If BRICS nations want to do that it is okay but we are going to put at least 100% tariffs on business they do with the US,” Trump said.
“We have them over a barrel. There is no way they are going to be able to do that. There will be 100% tariffs if they so much think about doing what they thought. So they will give it up immediately. So will China give it up,” he added.