Fact Vs Fiction: Trump's Tariff Tussle With India

On October 11, during a public meeting in Detroit, former US President Donald Trump called India the "biggest charger" of tariffs on foreign goods. This wasn't his first criticism. Last month, he called India "an abuser" of import tariffs, and in 2020, he labelled the country "Tariff King." Let's look at whether Mr Trump's claims about India's high tariffs are accurate, whether India's tariffs break global trade rules, and how this affects the India-US relationship.

- AJAY SRIVASTAVA

Trump focuses on the highest tariffs: India's average import tariff is 17 per cent, higher than the US' 3.3 per cent, but Mr Trump doesn't focus on this. Instead, he highlights the highest tariffs, which grab public attention. For instance, in 2019, he pointed out India's 150 per cent tariff on US whiskey. While India does impose high tariffs on products like whiskey (150 per cent) and automobiles (100-125 per cent), many countries use high tariffs to protect specific industries, so India is not alone in this practice.

Here are the highest tariffs imposed by the US on various product groups: Dairy products (188 per cent), fruit and vegetables (132 per cent), cereals and food preparations (193 per cent), oilseeds, fats, and oils (164 per cent), beverages and tobacco (150 per cent), minerals and metals (187 per cent), Clothing (135 per cent).

Mr Trump's claim that India is the Tariff King based on a few of its highest tariffs doesn't hold up when many other countries' highest tariffs are higher than India's. Japan's highest tariff is 457 per cent, South Korea's is 887 per cent, and the US' is 350 per cent, compared to India's is 150 per cent. The highest tariffs are often applied to protect sensitive sectors. For instance, Japan imposes high tariffs on rice to safeguard its farmers. However, these highest tariffs are exceptions and do not represent the rates at which most trade occurs. The average tariff provides a clearer picture of a country's import duties.

India's average tariff is 17 per cent higher than the US' at 3.3 per cent, but similar to countries like South Korea (13.4 per cent) and China (7.5 per cent). India's average tariff for industrial products is lower at 13.5 per cent, with a trade-weighted average of 9 per cent.