- The global community was bracing up for the well-established order to go haywire ever since the Republican candidature of Donald Trump was confirmed for the most powerful office in the world. Right through the campaigning, Trump was unequivocal in proclaiming with gay abandon about his intentions to make America great again. His MAGA exhortations and clarion calls to his loyal support base were meant to evoke local sentiments towards everything America and also aimed at his perceived indifference towards countries charging high tariffs. Now that he has assumed the office of the President of the United States of America, Trump has initiated measures to honour his commitments by raising tariffs on a few countries and threatening many.
PC: IAS Gyan
- What does it entail for the Indian trade interests here? And what about international trade itself? Make no mistake, Trump’s tit-for-tat tariffs will hurt trade in goods. The wise option for the Indian interests is to consider enhancing traction for our services sector. As reported, the maverick President enforced a flat 25% duty on all American imports of steel and aluminium, two key industrial products. India is the world’s second-largest producer of both, but a small US supplier. But even its $450mn worth of steel, aluminium exports to the US aren’t trivial. And mills making metal for export are in a real bind. Since Modi’s meeting Trump on his visit, there’s hope or it may have vanished by the time you read this.
PC: Straight Arrow News
- Knowing the businessman in him, Trump may be just fishing for a deal – he suspended his 25% tariffs on all Canadian and Mexican goods promptly last week. So, a little give and take might make him rethink if they charge us, we charge them. If he doesn’t, we lose some, but the US loses more. Recollect how Trump first imposed tariffs of 25% on steel and 10% on aluminium in March 2018, arguing these two metals are the bedrock of America’s defence-industrial base. His focus even then was on unfair trade, boosting America’s economy, protecting jobs, and raising revenue. Two years on, the numbers didn’t look encouraging. Yes, the US steel industry added 1,000 jobs. But because tariffs had made imported steel costlier, domestic steel prices rose.
PC: Forbes
- Mind you, each of those 1,000 jobs eventually cost US consumers $900,000 more – many times a mill worker’s pay. But 75,000 jobs that might have been added in industries making cars, washing machines, etc – products that use steel – didn’t happen because costly steel made products costlier, and uncompetitive against cheaper imports. In those two years, US firms filed 100,000 requests to be exempted from steel import tariffs. India must think about services. GCCs have thrived, and India’s strengths – democracy, demographics, comfort with English – create room for more. High-paid services create demand for low-paid services – cooks, cleaners, drivers – and in a booming economy there’s always a market for aluminium and steel. Over to the strategists.
