Did India dodge a bullet as Trump imposes major tariffs on Canada, China, Mexico?

US President Donald Trump on Saturday imposed 25% tariffs on imports from Mexico and Canada, with a lesser 10% rate on Canadian oil, natural gas and electricity. China faces a 10% tariff. India did not find mention in the announcement.

Notably, only a few days ago, Donald Trump flagged China, India, and Brazil as high-tariff countries. He threatened that the United States would impose tariffs on countries that ‘harm’ America. He stated that real progress in trade would only be achieved if the US took a firm stance against nations that engage in practices detrimental to the American economy.

In a subsequent social media post, Donald Trump escalated his rhetoric by warning that any BRICS nations attempting to replace the US dollar in global trade would face 100% tariffs on their imports to the US. Donald Trump insisted that the US would not tolerate actions undermining its economic interests, emphasizing his commitment to an “America First” policy.

However, the US president appears to have implemented a watered-down response or omitted the countries that he claimed had imposed the ‘higher tariffs’.

Instead, China, Mexico, and Canada, who are the top contributors to the US trade deficit, were served the axe. China contributes the highest at 30.2 per cent, Mexico 19 per cent, and Canada 14 per cent, according to the Research and Information System (RIS).

In that chart, India’s contribution is a mere 3.2 per cent of America’s overall trade deficit. However, India is also the ninth-highest contributor to the US trade deficit.

Why did Donald trump Impose Tariffs on Canada, China, Mexico?

Donald Trump said the tariffs are about stopping the illicit smuggling of fentanyl, as well as preventing illegal immigration on the U.S. borders with Mexico and Canada.

“We have big deficits with all three of them. And in one case, they’re sending massive amounts of fentanyl, killing hundreds of thousands of people a year with fentanyl. And in the other two cases, they’re making it possible for this poison to get in. We have about a $200 billion deficit with Canada… and a $250 billion trade deficit with Mexico,” Donald Trump reasoned his move during a press briefing.

US President Donald Trump had once famously posted on social media that “trade wars are good, and easy to win” — a claim that he’s now putting to the test against Canada and Mexico after imposing tariffs that within hours led to retaliatory measures by those two countries.

Did Trump threaten India? Are India-US Trade Relations in the Red?

Indian Express recalled the NITI Aayog CEO BVR Subrahmanyam, in December, suggesting that trade policies under US President-elect Donald Trump could result in a potential economic boom for India, driven by significant trade diversion in global trade.

Further, Global Trade and Research Initiative (GTRI) has also mentioned that US-China trade war, initiated in 2018 under President Trump with tariffs targeting key sectors, significantly reshaped global trade flows but failed to achieve its primary goals.

Even though Donald Trump criticized India’s tariff practices, and even threatened significant tariffs on the BRICS group (which includes India), the implications for the India-US trade relationship remain somewhat unclear. Notably, India has not been explicitly named in any formal tariff disputes initiated by Donald Trump administration.