June 11, 2018

US president Donald Trump once again accused India of charging 100% tariff on some imports, speaking after leaving the G-7 Summit in Canada where he upset America’s closest allies with his threat of trade war.

“I mean, we have India, where some of the tariffs are 100%. A hundred percent. And we charge nothing. We cannot do that,” said Trump at a news conference on Saturday, citing high taxes around the world on American goods as he re-litigated his differences with the G-7 countries.

“And so we're talking to many countries,” he said. Talks with India, at least, haven't gone well so far.

Failing to get an exemption from the Trump administration new & controversial 25% & 10% tariff on steel & aluminum imports, India went to the World Trade Organization (WTO) in May & sought “consultation” with the United States, a necessary 1st step in any dispute settlement process at the global body.

India has also sought retaliation claim to recover $31 million as the hit taken by it due to US levy on aluminum exports and $134 million on steel. It has also it could target US exports in its retaliation such as soya oil, palmolein & cashew nuts.

The United States accounts for 2% Indian steel exports.

According to sources, India also plans to restore duty cuts it had announced earlier this year on the import of high-end motorcycles. The duty was brought down to a common & unified rate of 50% from 75% for vehicles above 800 cc & 60% on those below. Harley-Davidson of America & Triumph of Britain were the major beneficiaries of India’s duty cuts.

Trump had been pushing for the cuts & had several times warned India of “reciprocal taxes”, arguing US tariff on Indian motorcycles was 0, much as his remarks in Canada.

Trump began by railing against Indian tariff on Harley-Davidson from his 1st few weeks in office. And continued even after India dropped the rates to 50%. “Now, the PM, who I think is a fantastic man, called me the other day.,” Trump said at a White House meeting with state governors in March, referring to a phone conversation with Prime Minister Modi.

He recounted, "He said, ‘We're lowering it (tariff on Harley-Davidson) to 50%’. I said, ‘Okay, but so far we are getting nothing.’ So we get nothing, he gets 50 (%), and they think we are doing- like they are doing us a favor. That is not a favor. And you know what I am talking about.”

Trump used Harley-Davidson to highlight his case against countries that had a trade surplus on America, with China leading the table.

In March, he announced 25% & 10% tariff on all steel and aluminum entering the United States. Some countries were granted exemptions such as Canada & Mexico as they negotiated a larger trade deal with the US. And some others were exempted for other reasons.

India was not. It went to WTO, seeking consultation. It has seen been joined by the European Union, Russia & China targeting the United States in separate filings. Thailand became the newest member of the group on 5th June.

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