File picture of U.S. President Donald Trump
| Photo Credit: Reuters

Trump said many companies would be investing in semiconductor manufacturing in the United States [File]
| Photo Credit: REUTERS

Washington DC:

Immediately after their hour-long meeting where US President Donald Trump and Prime Minister Narendra Modi discussed the entire gamut of India-US bilateral ties, the two leaders held a joint press conference where they took questions from the international media.

With Donald Trump announcing sweeping reciprocal tariffs for all countries as a tit-for-tat trade policy hours before his meeting with PM Modi, one of the questions asked to President Trump was about who is a tougher and better negotiator – him or Prime Minister Modi? To this, the US President swiftly replied “He is a much tougher negotiator than me and he is a much better negotiator than me. There is not even a contest.”

#WATCH | Washington, DC: US President Donald Trump says, “He (PM Narendra Modi) is a much tougher negotiator than me and he is a much better negotiator than me. There is not even a contest.”

(Video: ANI/DD) pic.twitter.com/V8EzU0FfE9

— ANI (@ANI) February 13, 2025

Speaking specifically about reciprocal tariffs, President Trump said that “it is only fair that taxes and tariffs are reciprocal.” Explaining his point he said that over time “many attempts have been made” by the US to reduce tariffs on US exports, “but since that has not worked out, we have now decided to reciprocate in the exact same way – something that has not been done before.”

Trade and tariffs have been a top priority for Donald Trump in his efforts to “make America great again”. On multiple occasions in the past, Trump has said “tariff” is his favourite word in the dictionary and that he is convinced they are key to the revival of the US economy.

Even on Thursday evening (US Eastern Time), Donald Trump said “We (US) have been a great economy, the number one in the world – still is – but, ever since Covid, the economy has been under stress. We will now revive it,” he said while answering another question on tariffs.

The two leaders spoke to the press even before the bilateral talks began. Donald Trump praised PM Modi saying “Prime Minister Modi is a great leader,” adding that “We’re going to make some wonderful trade deals for India and the US.”

Besides trade and tariffs, the two leaders had a detailed discussion on matters concerning regional and global security, the India-US defence partnership, foreign investment, energy, technology, education, visas, and immigration.

PM Modi is one of the first global leaders to travel to the US for an official visit and meet Donald Trump after his electoral win. This is PM Modi’s 10th visit to the United States as prime minister and fourth with Trump as President.
 

Washington, United States:

US President Donald Trump has threatened to open new fronts in his tariffs war by announcing reciprocal levies on other countries as soon as Tuesday, branding this “the only fair way” to trade.

Trump’s fresh salvo could bring a broad tariff hike to emerging market economies like India and take aim at European Union value-added taxes, fanning tensions with the bloc, analysts warn.

What are reciprocal tariffs?

Tariffs are taxes imposed on goods imported from another country.

As for reciprocal tariffs — during election campaigning, Trump promised: “An eye for an eye, a tariff for a tariff, same exact amount.”

And on Sunday, he said he would make a detailed announcement on the tariffs on Tuesday or Wednesday, adding that “every country will be reciprocal.”

One approach is to hike tariff rates on imports to match the rate that other countries apply to US products, said Goldman Sachs analysts in a note.

Matching this based on different products would raise the United States’ average tariff rate by around two percentage points. Doing so to match the average tariff imposed by countries raises the US rate by a smaller amount.

But taking a product-focused approach has complexities.

While Washington has relatively low average tariffs at a 2.7 percent rate in 2022, it has higher rates in “very politically sensitive” areas such as apparel, sugar and pick-up trucks, said Cato Institute vice president of general economics Scott Lincicome.

Similarly, including non-tariff barriers like regulations in the calculus would add to complications.

Who will be impacted?

Reciprocal tariffs may open the door to “a broad tariff hike” on emerging market economies who have high duties on US products, JPMorgan analysts expect.

If officials go by average tariff rates applied on all products, countries like India or Thailand — which tax imports at higher average rates than the United States does — could be affected.

Trump has previously slammed India as a “very big abuser” on trade and this week, National Economic Council Director Kevin Hassett told CNBC that India had high tariffs that lock out imports.

Lincicome cautioned that high tariffs are often also imposed by poorer countries, who use them as a tool for revenue and protection as they have fewer resources to impose non-tariff barriers like regulatory protectionism.

Goldman Sachs estimates that “there should be no effect on countries with free trade agreements like Mexico, Canada, and Korea, limiting the overall impact” if Washington took a country-based approach to reciprocal tariffs.

What are the complications?

It remains unclear if Trump views the policy of reciprocal tariffs as an alternative to a 10-20 percent universal tariff he floated on the campaign trail — or a separate policy.

One risk is that the Trump administration “could attempt to equalize non-tariff barriers to trade,” said Goldman Sachs in a note. In particular, he could consider value-added taxes (VATs) when deciding how much to adjust tariffs.

Doing so stands to raise the average effective tariff rate by another 10 percentage points, Goldman analysts added.

Such a move might also be a response to high European Union VATs, JPMorgan said.

What is the goal?

“One of the objectives is to create uncertainty as a negotiating tactic, but uncertainty is a tax on doing business,” Jeffrey Schott, senior fellow at the Peterson Institute for International Economics, told AFP.

Unpredictability surrounding tariffs, retaliation and non-trade issues all contribute to a situation that weighs on American and foreign firms, he said.

In the case of allies like Europe, Schott said, US objectives in negotiation could involve “economic and geopolitical priorities, including Ukraine.”

They could include finding a better resolution of the situation in Ukraine, which has been fighting off a Russian invasion since 2022, but also to expand US exports in key sectors like LNG.

Two-way street?

The United States, however, does not have the lowest tariffs in the world and stands around the middle when it comes to wealthy, industrialized countries, said Cato’s Lincicome.

“Should Trump’s system be based on average tariff rates, then ‘true’ reciprocity would require US tariff rate reductions on goods from dozens of countries,” he added in a recent report.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

New Delhi:

Donald Trump on Tuesday denounced India, China, and Brazil as “tremendous tariff-maker(s)” and said his government would not allow the three to continue down this path, declaring, “… we’re not going to let that happen any longer because we’re going to put America first.”

Speaking to House Republicans at a Florida retreat, the United States President acknowledged the three countries – founding members of the increasingly influential BRICS bloc – were acting in their respective best interests, but seemed also to insist “… they mean us harm”.

“We’re going to put tariffs on outside countries and people that really mean harm to us. Well… they mean us harm, but they basically want to make their country good. China is a tremendous tariff-maker, and India, Brazil, and so many other countries. (But) we’re not going to let that happen any longer… because we’re going to put America first,” Trump declared to cheers.

The comments came shortly after it emerged Prime Minister Narendra Modi is likely to meet Trump in Washington, as early as next month. The two leaders spoke on the phone Monday night; it is unclear if tariffs were on the agenda, but New Delhi’s view on ‘illegal immigrants was.

READ | “Mutually Beneficial, Trusted Partnership”: Modi-Trump Phone Call

However, the US President’s view on India and tariffs is seen by many as problematic, given he slammed Delhi – the US’ largest trading partner – as a “very big abuser” during his campaign.

Trump also spoke of a “very fair system” to “very quickly” make the US “richer and more powerful”, repeating what he said after he was sworn in last week; he said, “Instead of taxing our citizens to enrich other countries… we will tariff and tax foreign countries to enrich our citizens.”

And if foreign companies – Indian, Chinese, Brazilian, or others – want to avoid these high tariffs, Trump said, they would have to “build your plant right here in America”.

He also told the House Republicans of plans to slap tariffs on steel, aluminium, copper, and other materials required by the American military. “We have to bring production back… There was a time we made a ship a day. Now we can’t… We don’t know what the hell we’re doing.”

READ | “America First”: Trump Vows Tariffs On Nations That “Mean Harm” To US

High tariffs on goods imported into the US – specifically from China – were a frequent refrain during Trump’s campaign. He also warned of “100 per cent tariffs” on BRICS nations to (in his mind) shut down talk of member-nations not using the dollar as the common currency.

Trump’s tariffs tirade has a clear economic agenda, questionable though the means may be, and that is to jumpstart manufacturing in the US. By marking up the prices of key commodities like steel, semi-conductors, medicines, etc., he is hoping to do just that. “Under the ‘America First’ economic model, as tariffs on other countries go up, taxes on American workers and businesses will come down and massive numbers of jobs and factories will come home.”

READ | How Donald Trump Is Using “Tariffs” As A Weapon

The other perspective is ‘tariff as a weapon’, a point-of-view underlined by Trump’s clash with Colombia over deportations. The South American country initially refused to accept a plane loaded with ‘illegal immigrants’, only then to face massive 25 per cent tariffs and a trade war.

Colombian President Gustavo Petro eventually relented; he had to, of course.

READ | “Cooperate Or…”: In Colombia Face-off, Trump’s Strong Message

White House Spokeswoman Karoline Leavitt was quick to claim a ‘victory’, saying: “Today’s events make clear to the world that America is respected again”, and Trump echoed that sentiment Monday, telling reporters “it serves the world well to look at” the Colombia spat.

With input from agencies

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Washington DC:

With just weeks to US President-elect Donald Trump’s Inauguration, his aides are reportedly exploring plans to translate the Republican leader’s campaign pledges of imposing universal tariffs on imports from overseas into policy. In the run-up to the Presidential polls, Donald Trump has called for “universal” tariffs as high as 10 or 20 per cent on all imports to the United States, and a 60 per cent levy on goods from China.

However, the Republican leader’s aides believe that certain adjustments might need to be made in the original plan to accommodate political or economic realities, CNN reported quoting three sources familiar with the development.

Per the report, the Trump team is trying to come up with plans that cut closely to the blanket tariffs the President-elect had proposed as a candidate. They are reportedly exploring enacting tariffs on a subset of critical industries – either in advance of or alongside a broader tariff program – to highlight trade imbalances and spur US manufacturing activity.

Sources said that the discussion is still active on the policy as no final decisions have been made yet. 

Earlier, a report in The Washington Post said that Trump’s team was making a big shift from his plans during the 2024 presidential campaign by exploring tariff plans that would be applied to every country but only cover critical imports. 

However, the President-elect took offence to the article’s description that the move would pare back his campaign pledge. “The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back. That is wrong,” he wrote on his Truth Social platform on Monday.

If put into effect, the tariff plan of Trump’s team could lead to one of the biggest challenges to the global trade order in decades. It could invite retaliation from the rest of the world and drive prices up for consumers and businesses alike.

However, his economic advisers reportedly view this effort as necessary to bring manufacturing jobs back to the US economy. They are weighing options about how to move forward with something that resembles Trump’s original proposal but would limit the impact on the stock market and consumer prices. 

Even before implementation, Trump’s plans are reportedly facing resistance in his own camp, with incoming Treasury secretary, hedge fund investor Scott Bessent, “not entirely sold” on the idea of universal tariffs on all goods, CNN reported quoting people who have spoken with him.

Trump’s son-in-law, Jared Kushner, who worked on international economic policy during the first term, recently said that there was “probably more work that needs to be done” on tariffs on China.

However, Howard Lutnick, Trump’s pick for Commerce secretary, has reportedly supported using tariffs as a negotiating tactic and his confidante and former economic adviser Larry Kudlow has also suggested that tariffs could offset the cost of tax cuts.