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Why India’s Retaliatory tariffs are hitting US Exports for $900 million?

Chander Mohan
Chander Mohan

India's proposed retaliatory tariffs against US agricultural products that include apples, almonds and lentils will have an adverse impact on American exports worth nearly dollar 900 million. In view of the India's exports to the US in 2017-18 stood at $47.9 billion, while imports were $26.7 billion. The trade balance is in favour of India. 

India's proposed retaliatory tariffs are far less than that by China on more than 800 American agricultural products, which accounted for approximately $20.6 billion in exports to the US in 2017. 

In October 2018, US President Donald Trump described India as a "tariff king" as he reiterated his allegations that New Delhi has a high tariff rate on various American products. 

India last year also announced higher import duties on many US products in retaliation to President Trump's decision to impose heavy tariffs on imported steel and aluminum items, a move that sparked fears of a global trade war. However, India is the only major country which has been continuously postponing the implementation of the retaliatory tariffs despite announcing it more than six months ago. 

China is followed by Canada ($2.6 billion), Mexico ($2.5 billion), the European Union (EU) ($1 billion) and Turkey ($250 million) in slapping retaliatory tariffs on the agricultural products from the US. 

Countries have imposed tariffs on American agricultural products to retaliate against actions the Trump administration took in March, 2018 to protect US steel and aluminum producers and in response to Chinese intellectual property rights and technology policies. 

Since then, over 800 US food and agricultural products have been subject to retaliatory tariffs from China, the EU, Turkey, Canada and Mexico. US exports of those products to the retaliating countries totaled $26.9 billion in 2017, according to the United States Department of Agriculture (USDA) export data. 

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