The Hindus reacted to American duties with anger and anxiety, which is understandable – on the one hand because of its severity. On the other hand, because they felt distinguished, in a negative sense. Trump imposed an additional duty of 25 percent on India. As a punishment for buying Russian oil at reduced prices, and thus for “financing” the war of Russia in Ukraine. However, he did not decide on such a move to China and the European Union, despite the fact that they still rely on the import of Russian energy.
In the short term, India's economy will suffer. The US is their largest trading partner responsible for 20 percent. their exports and over 2 percent GDP. Even despite dismissals from duties for pharmaceutical and electronic products, about two -thirds of goods sent to the United States are currently subject to a customs tariff of 50 percent.
The: textile, shrimp, diamond and automotive industries will suffer the most – and therefore all those requiring a lot of work and focused in small cities. Loss of jobs will make it even more difficult for young Indians to find product employment.
Analysts estimate that American duties will cause a decrease in India's GDP by 30-80 base points. This happens when The economy of this country is one of the few bright points on the economic world map – In recent decades, it has reached an average annual increase above 6 %, despite the poor trade. The US played a key role in this, both as a market for goods and services, as well as a source of investment and technology. At the same time, American companies began to rely on a competitive suppliers from India. Trump's duties are threatened with disturbing this symbiotic relationship.
A ricochet blow
Ultimately Higher duties on goods from India will increase costs and prices, but for American producers and consumers. Products from this country – from skin to precise engineering – are of key importance for supply chains in the USA. Considering the fact that Trump's return to the White House was partly caused by the anger of voters caused by inflation, which raised in the country during the presidency of Joe Biden, Such a policy can be suicidal. Price pressure caused by duties can weaken Trump's political capital.
Equally short -sighted is the punishment for buying Russian oil. Imports by India Russian oil at reduced prices softened global oil prices, bringing indirect benefits to Western economies. The sudden suspension of these purchases would probably cause a rapid increase in prices, which OPEC and American producers would not be able to quickly balance. The rising energy costs would affect the supply chains, causing inflation around the world – including the United States – which would additionally weaken the Trump's economic program.
The anger of the Trump's administration caused by the United States trade deficit with India omits the wider benefits that his country derives from cooperation with New Delhi. After taking into account investment income, the sale of defense products, license fees and educational services, the balance sheets in favor of the United States. Students from India – currently the largest group of foreign students in the United States – Every year they bring billions of dollars to the American economy.
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In addition, American technology companies depend on the constant influx of talents from India – they have become the center of global competence centers of international corporations. These increase their profits, ensuring inexpensive IT support, design, accounting, customer service and other functions. American duties threaten to destabilize this interdependent ecosystem.
Many years of efforts in vain
Perhaps the most important thing is that the loss of access to the developing middle class in India, a rapidly growing consumer market, which according to forecasts by 2030 will exceed 800 million people, It will be costly for the US in the long run.
Finally, the high duties carry a serious geopolitical risk associated with India alienation. For two decades, subsequent American administrations treated this country as a strategic counterweight to China through initiatives such as quad, increased exchange of intelligence information and promoting the role of India in the diversification of the supply chain.
Prime Minister of India Narendra Modi, Russian President Vladimir Putin and chairman of the Chinese People's Republic XI Jinping, October 23, 2024.Contributor / Contributor / Getty Images
This hard -developed progress is now threatened. During the recent peak of the Shanghai Cooperation of the Prime Minister of India Narendra Modi, he met with Russian President Vladimir Putin (who is to visit New Delhi this year) and the chairman of the Chinese People's Republic of the People's Republic of the People's Republic of Poland, showing India's involvement in striving to create a multilateral alliance. The approaching India to China is the opposite of what the US wanted to achieve their strategy towards the Indo-Pacific. “To face China, the United States must have a friend in India,” Nikki Haley, a former United States Ambassador at the UN, recently warned.
Meanwhile, the first five BRICS Member States – Brazil, Russia, India, China and South Africa – begins to unite around a common mission. You can describe it briefly: the fight against the hegemony of the United States. Trump's hard policy, including his duties, intensified activities to develop other payment systems and solutions that allow you to bypass the dollar and allow trade in local currencies.
Even partial progress in this field can have far -reaching effects. The status of a dollar as a global reserve currency gives the United States the possibility of cheap loans and free impact. Using the customs as weapons and antagonizing the rising powers, the US risks accelerating the dedolarization process and weakening their control over global trade and capital flows.
Isted chance
How can India respond to Trump's customs? Diversification of export markets and strengthening the national industry. The necessary reforms may be painful, but will help Indy achieve greater self -sufficiency, strengthen Asian trade ties and expand partnerships in Europe and Africa.
It will be much more difficult for the United States to rebuild India's trust. In contrast to smaller economies, which can be forced to make concessions without geopolitical consequences, India has 1.46 billion inhabitants – and ambitions to become a power in a multi -service world. It is unlikely that they quickly forget about Trump's criminal duties.
Americans will not forget about them either. Trump's duties imposed on India can bring short -term political benefits, but undermine the US long -term interests, By discouraging the growing trading partner, encouraging the use of substitutes for the dollar, disturbing the supply chains and threatening access to the key market. India will adapt and become more resistant. The United States will probably end with one conclusion – that they have lost their key partnership for the implementation of their economic and geopolitical interests.
We publish the text courtesy of Project Syndicate.
I’m Ashley Davis as an editor, I’m committed to upholding the highest standards of integrity and accuracy in every piece we publish. My work is driven by curiosity, a passion for truth, and a belief that journalism plays a crucial role in shaping public discourse. I strive to tell stories that not only inform but also inspire action and conversation.
