With only one day left for the retaliatory tariffs by the US to come into effect, President Trump has stated that India is set to "substantially" reduce its tariffs, along with other allies, before what he called "Liberation Day."
Speaking to the media from the Oval Office, Trump said that the US has been “unfairly targeted” by global trade policies and argued that his strategy was providing results.
“I think I heard that India just a little while ago is going to be dropping its tariffs very substantially and I said why didn’t somebody do this a long time ago,” he said.
He also added that he is not worried about how his policies could push US allies closer to China saying that the European Union’s recent reduction of car tariffs was a proof of success.
“No, I’m not worried about it. I think they have a chance of doing better actually with the tariffs. It can actually help them in a certain way and I think a lot of them will drop their tariffs because they’ve been unfairly tariffing the United States for years,” he said.
White House Press Secretary Karoline Leavitt also criticised several countries for imposing restrictive trade policies that negatively affect US businesses.
“India currently imposes 100 per cent tariffs on American agricultural products. The European Union charges 50 per cent on American dairy, Japan levies 700 per cent on American rice, and Canada imposes nearly 300 per cent on American butter and cheese,” Leavitt said, adding that these barriers make it “virtually impossible” for American products to compete in foreign markets.
“It’s time for reciprocity. The president is making historic changes to protect American industries and workers,” she said.
Leavitt further confirmed that the full cabinet would be present for the unveiling of a new tariff plan, although details of the plan remain unclear, as Trump and his administration have proposed several, sometimes conflicting, options in recent weeks.
“Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it,” Leavitt declared. “The President will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades. He’s doing this in the best interest of the American worker.”
Leavitt said that the details of the plans are up to the president to announce.
Since taking office just months ago, Trump has proven to be aggressive with tariff threats, all while creating a sense of whiplash through on-again, off-again trade actions. And it’s possible that there will be more delays or confusion this week.
However, economists warn that the broad tariffs proposed by Trump could have unintended consequences.
Tariffs typically trickle down to the consumer through higher prices - and businesses worldwide also have a lot to lose if their costs rise and their sales fall.
Import taxes already in effect, coupled with uncertainty around future trade actions and possible retaliations, have already roiled financial markets and lowered consumer confidence while enveloping many with questions that could delay hiring and investment.
India has already reduced tariffs on a range of items, from motorcycles to luxury cars, and has agreed to increase its purchases of US energy, according to Christine McDaniel, a former US trade official.
The White House has pointed to several examples of particularly lopsided tariffs: Brazil imposes an 18% tax on ethanol imports, including those from the US, while the US tariff on ethanol is only 2.5%.
Similarly, India imposes a 100% tariff on foreign motorcycles, while the US charges only 2.4%.
However, a senior European Union official warned the US that the world’s largest trade bloc “holds a lot of cards” in dealing with the Trump administration's new tariffs and has a robust plan for retaliation, if necessary.
The official pledged to implement “reciprocal” tariffs to match the duties other countries impose on US products.
“Europe has not started this confrontation. We do not necessarily want to retaliate, but if it is necessary, we have a strong plan to retaliate and we will use it,” European Commission President Ursula von der Leyen told EU lawmakers.
(With inputs from Associated Press)
