New Delhi: US President Donald Trump’s tariff threats made their way to the Rajya Sabha Thursday, with the Opposition questioning the Centre on what it planned to do if the threats turned into reality.
Congress leader P. Chidambaram brought up Trump’s announcement that he would introduce sweeping tariffs on 2 April this year to reset global trade. Trump has already branded 2 April as “Liberation Day” against trading partners, who, he claims, have been “ripping off” the US.
“He (Trump) has made it clear to no less than the Honourable Prime Minister (Narendra Modi). When Mr Modi protested, he said I don’t care, I will impose tariffs on India. If he presses tariffs on India on 2 April, what is the government’s response? What is India’s response?” Chidambaram asked in the House.
He pointed out that there has not been a policy statement on the issue, a discussion in Parliament or a consultation with opposition parties.
“The government is holding its cards close to its chest if it has any cards at all,” Chidambaram said.
He also contrasted India’s approach with Canada Prime Minister Mark Carney’s “openness”, saying that the latter was a mark of democracy and transparency.
“A tariff war will be, in breach of, WTO multilateral and bilateral trade agreements and international conventions. It will wreck the world economy. It will ruin the economies of developing countries. A tariff war will lead to a trade war. The whole world will be hurt,” he cautioned.
Communist Party of India (Marxist) MP John Brittas also questioned the government. “Can it withstand Trump’s pressure? I do not think so,” he said.
However, the BJP and its allies came to the government’s defence.
“Second April is the date. Till that time, tariffs have not been imposed. What could anybody or Nirmala Sitharaman ji say about it?” BJP member Ratanjit Pratap Narain Singh asked.
Praful Patel, a leader of the Ajit Pawar-led Nationalist Congress Party, said, “I am very confident that our government will be able to negotiate very effectively and also take effective measures to protect the interests of the Indian industry as well as the exports which take place from India.”
BJP leader Ghanshyam Tiwari asked, “Who is scared of Trump? He is Trump. We have Narendra Modi’s trump card. It is the sort of card that works worldwide.”
The Trump effect
In the House, Chidambaram said that the reduction in customs duties in the Union Budget was an effect of Donald Trump’s ascension to the US presidency.
“I did not expect the Honourable FM [Union Finance Minister Nirmala Sitharaman] to mention, in her speech, all the duty reductions, but she should have certainly shared in the speech. They are there in the annexures. She has reduced customs duty on motor vehicles, passenger cars, goods transport vehicles, motorcycles, even bicycles and toys. These were all tucked away in an annexure, which she read, and most people do not read,” he said.
He listed the various levels of reductions in these duties as well. The reduction is from 125% to 75% on passenger cars, 100% to 70% in the case of motorcycles, including the famous Harley Davidson, 35 to 20% on bicycles, and 70% to 20% in the case of toys, noted Chidambaram.
“Is this a genuine change of heart? Is it a genuine change of policy?” Chidambaram, then, asked rhetorically, answering, “I do not believe so.”
“The Trump effect has forced the government to reduce these duties,” he added.
In her response, Nirmala Sitharaman said that India had been reducing duties Budget after Budget “so that India’s aspiration for being a manufacturing hub and also India’s aspiration in building capacities for battery manufacturing advanced chemistry is being supported”.
“I heard quite a few members saying a tariff war has started, so in response to the tariff announcements made by President Trump, we are doing it [reducing customs]. No; we have been doing it from 2023 … It has nothing to do with today’s global situation,” Sitharaman added.
(Edited by Madhurita Goswami)
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