Modi reliable, Trump unpredictable? It’s the exact reverse on trade
The Modi administration has to consider the image it is creating for India. It is contributing to a sense of uncertainty.
While Indian Prime Minister Narendra Modi is regarded as steady and reliable, US President-elect Donald Trump is a capricious and unpredictable leader. That’s the general consensus among most commentators. However, the reality is the contrary when it comes to trade issues.
US (TAT): Trump’s views and policies have remained constant throughout time. Modi has been the one to make unpredictable and unexpected judgments that have left businesses and trade partners wondering.
This means that although Indian trade professionals have a fair idea of what to anticipate from Trump 2.0, importers and trade partners in India are less confident about Modi 3.0’s trade policies.
Reducing the US’ enormous trade imbalance with the rest of the world was a major component of Trump’s “Make America Great Again” campaign, which helped him win his first election in 2016 and become president of the United States in 2017.
He frequently discussed enforcing import duties to safeguard American companies. There was no room for doubt. He made it plain that he would.
He immediately followed through on his promises after becoming office. Trump implemented a number of tariff increases within the first year of his presidency. First, he increased import taxes on washing machines and solar parts in January 2018.
He placed duties on imports of steel and aluminum from the majority of nations, including India, in March of that year. He expanded similar duties to Canada, Mexico, and the European Union in June. No one was taken aback.
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Trump’s statements and actions have been constant, even when it comes to India. Throughout his administration, he urged US Trade Representative (USTR) Robert Lighthizer to encourage India to lower tariffs and increase market access.
India largely cooperated with Trump’s strong demands that it lower import taxes on Harley-Davidson motorbikes.
The classification of India as a “beneficiary developing country” under the Generalized System of Preferences (GSP) program was actually revoked by Trump in 2019. As a result, duty-free imports into the US were no longer available to Indian exporters in a number of industries.
“India’s termination from GSP follows its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors,” Lighthizer said in a statement at the time. Once more, a consistent stance, although one that India does not want.
It’s not surprising that trade experts in India are certain of what to expect from Trump 2.0 given his repeated attacks on nations that impose high import duties, including his recent accusation of calling India a “very big abuser” of tariffs during his pre-election rallies in September 2024. There are also rumors that he may re-appoint Lighthizer as USTR. There is no room for doubt.
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