The View From India newsletter: Trump and his trade war

US President Donald Trump speaks to the press upon arrival at Joint Base Andrews in Maryland on February 2, 2025, as he returns to the White House from Florida. (Photo by Jim WATSON / AFP)
| Photo Credit: JIM WATSON
(This article is part of the View From India newsletter curated by The Hindu’s foreign affairs experts. To get the newsletter in your inbox every Monday, subscribe here.)
“The dumbest trade war in history” – that’s how the Wall Street Journal’s Editorial Board described US President Donald’s recent decision to impose tariffs on Canada, Mexico, and China, in retaliation to “illegal” immigrants and drugs that he said were “entering the US”.
As my colleague Stanly Johny wrote in the last newsletter, President Trump dramatically shifted America’s policy barely a week into office. And soon after, he declared an economic emergency, placing duties of 10% on all imports from China and 25% on imports from Mexico and Canada.
Just as Mr. Trump set off a trade war, strong reactions followed. Canada and Mexico were quick to announce retaliatory tariffs against U.S, contending they were forced to respond in kind, since the Trump administration had chosen confrontation over dialogue. China, too, denounced the move and has vowed to challenge President Trump’s tariff at the World Trade Organization and take “countermeasures” in response to the levy.
A day after the new tariffs came into effect — on February 1, 2025 — President Trump said Americans could feel “some pain” from the emerging trade war and claimed that Canada would “cease to exist” without its trade surplus with the United States.
According to American economist and Nobel Laureate Joseph Stiglitz, “Virtually all economists think that the impact of the tariffs will be very bad for America and for the world.” While many expect that it may drive a surge in trade protectionism world over, the tariff war is bound impact Americans, by increasing inflation, slowing economic growth and importantly, putting workers and ordinary people under enormous pressure as they foot the bill for Mr. Trump’s tariffs.
In India, Tariff revisions for “better optics”
Meanwhile, in India, the latest round of import tariff revisions announced in the Budget have done away with the peak rates of 150%, 125%, and 100% which applied to just five items, but had created “bad optics” about India’s tariff structure, top officials told The Hindu. Such high tariffs have led to criticism of the sort levelled by U.S. President Donald Trump, who has often clubbed India with China as a “tariff abuser”. Even as Mr. Trump has notified higher tariffs on imports from Canada, China, and Mexico, Indian officials are learnt to have readied a fact-sheet laying out the country’s tariffs on key U.S. products, some of which have been slashed further in the Budget. This could be presented to American counterparts through diplomatic channels, writes The Hindu’s Business Editor Vikas Dhoot.
Meanwhile, as India prepares for a visit by Prime Minister Narendra Modi to Washington D.C., and Mr. Trump’s visit to New Delhi later this year, what are the key issues in focus? With the new U.S. President’s policies impacting immigration, technology and trade, India must count the cost to its economy, our Diplomatic Affairs Editor Suhasini Haidar wrote in this note on dealing with ‘Trumperica’.
Top 5 stories this week:
1. Unclear agenda: The Hindu Editorial on Donald Trump and his policy agenda
2. Why is Donald Trump trying to overturn more than a century of precedent on birthright citizenship? Priscilla Jebaraj explains
3. Who is Pete Hegseth, Trump’s Defense Secretary who says reclamation of the warrior culture is at the core of his strategy to rebuilding the U.S. military? Read Varghese K. George’s profile
4. Amidst Gaza ceasefire, India revives diplomatic outreach for economic corridor with West Asia, Europe, writes Suhasini Haidar
5. New Delhi lodged a ‘strong protest’ with Colombo over the Sri Lankan Navy firing at Indian boat, injuring two fishermen
Published – February 03, 2025 11:43 am IST
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