Over the weekend, India announced retaliatory tariffs in response to President Trump’s imposition of steel and aluminum tariffs. Those retaliatory tariffs, designed to exactly offset the value of Trump’s tariffs, are just the first wave of trade moves India is planning against the United States. India already last month lodged a formal complaint against Trump’s tariffs with the World Trade Organization (WTO), arguing they are illegal. Hoping still to negotiate for exemption from Trump’s metals tariffs, India held off on announcing retaliatory tariffs until now, however, when it sees its exemption request has been ignored by the Trump administration.
India joins Canada, China, the European Union, and Mexico in imposing retaliatory tariffs to counterbalance the metals tariffs Trump has imposed on them. India’s plan includes immediately increasing some tariffs on 30 U.S. products, including cars, heavy machinery, seafood, and agricultural products, by as much as 50% to offset what is an estimated $240 million loss to India due to Trump’s tariffs. An additional 114 U.S. products will be subject to additional tariffs by India at a later point. That threat of another layer of tariffs against the U.S. is presumably being used by India to try to get Trump to negotiate. According to Quartz:
On June 16, India’s ministry for commerce reportedly notified the World Trade Organisation (WTO) that it would hike tariffs on 30 imported American goods, by up to 50% over the current duties. These include motorcycles, heavy machinery, chocolates, almonds, and shrimps. This hike is in response to the US increasing the duty on aluminium and steel imported from India in March this year. India’s reprisal follows the US government’s reported snubbing of a request from India to be exempted from the higher tariffs. “Our estimates place a combined $240 million loss for India on account of Mr. Trump’s steel, aluminium tariffs and we felt a reciprocal tariff of a similar amount on US imports would be fair,” a senior commerce ministry official told the Business Standard newspaper…Higher tariffs on another 114 items, including chemicals, medical equipment, and energy products, will come into effect later.
While it is laudable that many countries are not simply rolling over in the face of Trump’s unilateral tariffs, the retaliatory tariffs do mean that many products are likely to be more expensive for U.S. consumers. Also, Trump’s metals tariffs alone are likely to increase the cost of goods made with aluminum and steel in the U.S., since U.S. manufacturers often have to rely on foreign producers to get their raw materials, and those raw materials will have to cost more to compensate for the tariffs Trump has placed on their import.
This certainly sounds like the initial stages of a trade war, the blame for which lies squarely, and solely, at President Trump’s feet.