As promised, US President Donald Trump announced reciprocal tariffs on all American trading partners Thursday afternoon. Each country will be assessed individually, factoring in value-added taxes, foreign tariff rates, industry subsidies, regulations, and currency undervaluation to determine customized duty rates. Trump claimed, “It’s gonna make our country a fortune.”
The tariff review will be completed within weeks or months and could kick-start bilateral negotiations with other countries. Trump took the occasion to reiterate that Canada should become a 51st state, chastising it for not meeting NATO spending thresholds and repeating his false claim that the US “subsidizes” Canada to the tune of $200 billion a year.
Then there’s India. Trump’s proclamation came ahead of his meeting with “total killer” Indian Prime Minister Narendra Modi at the White House. Modi reportedly arrived bearing a “gift”: tariff reductions on India’s imports of US electronics, medical equipment, and chemicals, as well as commitments to purchase American liquefied natural gas and defense equipment.
What else does Trump want from Delhi? Trump wants to reduce the US trade deficit with India, $45.6 billion in 2024. The average US tariff rate on Indian imports is currently 2.2%, while India’s is 12% on US goods. Trump also wants India to reduce the emigration of its citizens to the US – both H-1B visa-holders working in the tech industry and undocumented migrants. India is the third largest source of undocumented immigrants in the US.
On Thursday, Trump said he would match India’s tariffs. “We are being reciprocal with India … Whatever India charges, we charge them.”
Both men agreed on Thursday to begin talks on an early trade deal to resolve the tariff standoff. Modi said he would buy more US oil, gas, and military equipment while fighting illegal immigration, and Trump said the US would ultimately sell F-35 stealth fighters to India.