Washington:

President Donald Trump’s tariffs will have a major ripple effect on American households, and drastically lower the purchasing power of poor households, as noted by the Congressional Budget Office.

Trump’s tariffs could add an extra $830 tax this year on the average US household as analysed by the nonpartisan nonprofit Tax Foundation.

The president has been threatening tariffs on various countries since his presidential campaign and has said that since January 31, he would impose 25 percent tariffs on goods imported from Mexico and Canada and from February onwards, 10% on imports from China.

“It’s something we’re doing, and we’ll possibly very substantially increase it, or not, we’ll see how it is,” Trump said. “But it’s a lot of money coming to the United States.”

Moreover he has threatened to impose 100% tariffs on BRICS nations including India if they create their own currency and replace the dollar.

However, the foundation found that his proposed tariffs would shrink the economic output of the country by 0.4% and increase taxes by $1.2 trillion between 2025 and 2034. In addition to that, the tariffs could even threaten the American gains of recent years.

The tariffs levied during Trump’s first term and Biden’s recent term have also hurt the economy.

The research suggests that Trump’s administration imposed approximately $80 billion in new taxes through tariffs between 2018 and 2019. The Biden administration retained the tariffs and in May added additional tariff hikes on $18 billion of Chinese goods, including semiconductors, which amounted to a tax increase of $3.6 billion.

It also shows that both Trump’s and Biden’s tariffs have lowered output, employment, raised prices and produced a “net negative impact on the U.S. economy.”

The Congressional Budget Office estimated that tariffs would hike up consumer goods but they added that after 2025, they would not have any “additional significant effects on prices.”
 

New Delhi:

India’s diplomacy stands out globally for its ability to balance ties between adversaries. The latest example of this is happening this week. As foreign minister S Jaishankar touches down in New Delhi after a five-day visit to the US for Donald Trump’s inauguration, foreign secretary Vikram Misri heads to China to foster ties with Beijing.

Just ten days ago, during a visit to Spain, foreign minister S Jaishankar had said India is one of the very few countries in the world that can engage both Russia and Ukraine, as well as Israel and Iran. “This is something very, very unique. And it is unique because if you look at the world today, it is a very polarised world,” he said.

Donald Trump has threatened to impose hefty tariffs on China and even the BRICS+ countries, which India is a member of as well. China, the world’s second-largest economy, has warned that it will retaliate, should Washington actually follow through. President Trump has also targeted China over its presence in the Panama Canal and said the US will take control of the waterway even if it means involving the military. China, on the other hand, has warned Washington over its involvement with Taiwan. Both nations have sanctioned each other.

ENGAGING ALL SIDES

Amid all this, India, which according to PM Modi, has “always chosen the side of peace”, aims to engage all sides for positive and constructive outcomes. Earlier this week, S Jaishankar strengthened India-US bilateral ties when he met the US Secretary of State and National Security Adviser for their first foreign engagements after the Trump administration took over. As PM Modi’s special envoy, Dr Jaishankar was also given the first seat at the US President’s inauguration.

As he returned after concluding “a very positive” visit to Washington, India’s foreign secretary heads to Beijing to build the momentum in India-China ties following a meeting between PM Modi and Chinese President Xi Jinping in Russia late-last year. Foreign Secretary Misri’s visit was preceded by a visit by National Security Adviser Ajit Doval last month when he met Chinese foreign minister Wang Yi.

REBUILDING AFTER THE STORM

India and China, two of Asia’s leading economies and the world’s most populous nations, are working to boost bilateral ties after a four-and-a-half-year-long military standoff along the Line of Actual Control or LAC brought ties to a grinding halt. After dozens of rounds of talks – both diplomatically and militarily – an agreement was reached and troops on both sides pulled back from the buffer zones, returning the status quo-ante. This happened within a week of PM Modi and Xi Jinping announcing it during a meeting in Russia late last year. Following this, Chinese and Indian foreign and defence ministers also met each other on multilateral occasions.

After Ajit Doval, foreign secretary Vikram Misri’s will be the second high-level visit by an Indian official to Beijing in a month.

A WELCOME FROM BEIJING

China has welcomed Foreign Secretary Vikram Misri’s visit this weekend and sounded positive about its outcome. “We welcome Foreign Secretary Shri Vikram Misri’s travel to China for the meeting of the Foreign Secretary-Vice Minister mechanism between China and India,” Chinese Foreign Ministry Spokesperson Mao Ning said.

India’s Ministry of External Affairs also said that “Foreign Secretary Vikram Misri will be visiting Beijing on January 26 and 27 for a meeting of the Foreign Secretary-Vice Minister mechanism between India and China. The resumption of this bilateral mechanism flows from the agreement at the leadership level to discuss the next steps for India-China relations, including in the political, economic, and people-to-people domains.”

THE AGENDA

Besides bilateral issues such as boundary talks, maintaining peace along the LAC, the building of the world’s largest dam on the Brahmaputra, resumption of the Kailash Mansarovar Yatra, people-to-people ties, resuming direct flights between the two countries, and facilitate the issuance of visas to Chinese citizens, the two sides are also likely to touch upon issues of mutual global interest.

“All matters of mutual interest will be discussed,” the foreign ministry said at a press briefing in New Delhi ahead of the foreign secretary’s visit.

The BRICS+, where both countries are threatened with massive tariffs, might figure in talks as well, as would the latest sanctions threat to countries dealing with Russia and buying Russian oil – again a common threat to both countries. Regional issues such as the situation in the Middle East and in Syria are likely to be discussed too.

US backing out of the Paris Climate agreement and the WHO, as well as the much-needed reform of the United Nations and the Security Council are likely to be discussed as well.

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Washington DC:

A new day, a new threat – that’s what Donald Trump’s mantra seems to be as he sets his eyes on his new prey – the European Union. Weeks before his oath-taking ceremony, which will officially make him the next US President, Mr Trump today threatened the EU with consequences, if it does not reduce the “tremendous” trade gap with Washington.

Donald Trump has demanded that Europe buy most of its oil and gas from the US. He also said that if it doesn’t, then there will be “TARIFFS all the way” – capitalising the word to show greater emphasis to it, implying they may be steep.

Writing on his platform Truth Social, Mr Trump stated that “I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas – Otherwise, it is TARIFFS all the way!!!”

In his previous term too, Donald Trump had said that “For far too long Europe has been riding on the back of the US – and we have allowed for that to happen.” He had at the time also threatened to stop all excess US funding to NATO saying “Europe must contribute to it too”.

According to the latest US government figures which shows data from 2022, the United States’ current trade deficit with the European Union stands at $202.5 billion. While American imports from European Union countries stood at $553.3 billion that year, exports to the EU were billed at $350.8 billion.

Donald Trump wants to address this trade imbalance swiftly. Though his threatening approach may not be the best way to do it, he is convinced it will help “make America great again”. Tariffs, he says, is his favourite word in the dictionary.

‘LOSING TO EVERYONE’

Speaking to reporters at his resort-cum-residence Mar-a-Lago in Florida recently, Mr Trump had said “Our country right now loses to everybody”. He blames this on “bad deals” made by successive regimes over the past few decades in the US. He believes tariffs will fix this. “Tariffs will make our country rich again,” he told the reporters.

Putting his words to actions, he has asked his team to draw up executive orders that he will sign on the first day of his second term as President. These include sweeping tariffs on import of goods and on tackling immigration laws.

Besides all of Europe, Mr Trump has threatened three of the US’ largest trading partners too – China, Mexico, and Canada. He has already declared a 25 per cent import tariff on Canada and Mexico and a 10 per cent tariff to begin with against China.

Europe has already started looking for options beyond the United States with the EU signing a massive free trade agreement with four major South American countries – Brazil, Argentina, Uruguay, and Paraguay. The deal will benefit nearly 700 million people across Europe and South America.

After the deal was signed European Commission chief Ursula von der Leyen took a dig at Donald Trump without naming him. “Strong winds are blowing in the opposite direction (compared to the free trade deal) – towards isolation and fragmentation”, she said, adding a word of praise for the free trade pact calling it a “trade bride” between Europe and America.

Will tariffs really help “make America great again”, or will the US “lose to everybody” in the true sense – only Trump can tell.