"Whether it's India, whether it's China, we're going to impose tariffs on them. We're going to announce reciprocal tariffs very soon. Because they're charging us, we're charging them. That's it," US President Trump had announced.
Following this, President Trump initiated a trade war against China. He imposed a 25% tariff on Mexico and Canada and a 10% tariff on China.
In response, China retaliated with counter-tariffs. It announced an additional 15% tax on chicken, wheat, corn, and cotton imported from the US. China had already imposed a 15% tariff on US coal and liquefied natural gas exports, along with a 10% tariff on oil and agricultural equipment. These measures could significantly reduce US exports of these commodities, leading to substantial financial losses.
China’s Foreign Ministry openly warned Trump, stating, "We are ready to fight with the United States to the last. We are ready to wage a trade war. Whether it is a trade war, a tariff war, or any kind of war, we are prepared to face it. No matter how bitter the situation becomes, we will fight to the end."
China, Mexico, and Canada account for the largest shares of the US trade deficit, with China alone making up 30.2%, followed by Mexico at 19% and Canada at 14%. In contrast, India contributes only 3.2% to the US trade deficit, ranking ninth overall.
While India has not been targeted in the first wave of US tariff hikes, no one can predict what actions Trump might take against India in the future. International economists suggest that Trump’s policies could pose challenges to India's economic growth, and it is possible that India could be included in the next list of tariff-affected countries.
How will Prime Minister Modi handle this situation? Will India, like China, enter into a trade war with the US? We will have to wait and see!