India Must Ignore Trump's Trade Tariff Trap
US President Donald Trump is becoming increasingly unpredictable, if not crazy, with his freakish combination of styles to deal with countries and issues – from trade to diplomacy. The 25 percent import tariff on India since last Friday may not considerably hurt India's export trade with the US, but it threatens to develop a crack, or maybe even distrust, in the well-developed India-US diplomatic relations over the past several years. And, that should be a bigger concern before the democratic institutions in both India and the US. Trump is most unlikely to remain as the effective US president after the November 2028 election though he is selling 'Trump 2028' caps suggesting there may be loopholes to the president's two-term limit. He seems to be hell-bent on creating enough confusion around the so-called US allies for the next president to repair them easily.
India is not a trade surplus country. Its global merchandise trade deficit has been growing year after year. In 2024-25, the country's trade deficit jumped to $282.83 billion from $241 billion in the previous fiscal year. The Indian government does not seem to be quite concerned. The US too is a big trade deficit country. Last year, the US recorded a historic $1.2-trillion goods trade deficit. Ironically, behind the ballooning trade gap of both the US and India is China. India's goods trade surplus with the US may have doubled over the last decade, rising from $20 billion in 2015 to $40 billion in 2025, but its trade deficit with China has more than doubled during this period, reaching a record high of $99.2 billion in 2024-25. According to the UN COMTRADE database on international trade, China had slashed down imports from India to merely $18 billion, last year. India neither protested nor took action to drastically cut imports from China.
If China's anti-India import policy does not hurt the sentiments of the import-insensitive Indian government, the dumping of a mere 25 percent import tariff on India by President Trump on certain select items such as textiles, telecom, gems and jewellery, oil and gas, and food and agriculture with effect from this month should not unduly concern India. Unfortunately, the Indian government and the local media have always been more focussed and sensitive on US policies than Chinese practices. While the US trade policy has always been linked with its foreign policy, India's trade policy seems to totally ignore China's highly aggressive foreign policy that seeks to surround India with its growing military presence all around the country. The so-called Atmanirbhar Bharat (self-reliant India) continues to import more and more from China. India imports a very large range of low-cost products from China, including electronics, fashion apparel, toys, and industrial machinery despite concerns over their potential impact on India's domestic industries and employment. Massive imports from China are primarily responsible for growing unemployment in India.
India has been a major importer of Chinese smartphones, laptops, televisions, and other low-cost electronic devices such as clothing and textiles including activewear, casual wear, and children's fashion, to meet the country's growing local demand. India's significant portion of toy imports come from China. The current size of India's toy market is worth over $1.2 billion. Chinese manufacturers offer a wide variety of affordable and innovative toys. India also imports a wide range of other low-cost products from China, including household goods, kitchenware, baby carriages, and consumer products. The influx of cheap Chinese imports is challenging India's domestic manufacturers, potentially impacting their competitiveness and production. Leave alone the domestic job loss.
Trump's trade tantrums apart, India could import a lot more from the US, instead of China, especially in areas where the US has a competitive advantage. A shift in India's trade approach could be driven by factors such as diversification of supply chains, reducing dependence on China, and potentially leveraging the US's technological and manufacturing prowess. The country's reliance on China, particularly in areas like electronics and pharmaceuticals, creates strategic vulnerabilities. India should import more from the US where it has an intrinsic strength that could help India reduce its dependence on China and build more resilient supply chains. The US continues to be a major global exporter of goods across various sectors, including machinery, electronics, and pharmaceuticals. In fact, India could utilise the services of many top US companies which are present in India and doing very good business in the country as well as exporting their wares to influence US trade and business decisions.
A number of prominent US multinational companies have significant manufacturing operations in India. They include Ford (exporting engines from its Chennai plant, and making software development), General Electric (GE), Honeywell, Apple, Cisco, Cognizant and Cummins to mention a few. These US giants have chosen India for its skilled workforce and growing market. GE has a long-standing relationship with India. It manufactures various products and technologies across different sectors. Honeywell has a strong manufacturing footprint in India, focusing on aerospace, building technologies, and performance materials. Cummins, a global power technology leader, manufactures engines and related components in India. Apple Inc. has so far ignored the Trump threat to expand India operations and export back to the US.
The 3M, a diversified science company, has invested in manufacturing in India to serve both the domestic and export markets. The Boeing company has been expanding its manufacturing activities, leveraging the country's growing aerospace industry. Boeing is using India's capability to outsource products and services with a network of some 300 Indian suppliers. The business is worth $1.25 billion annually. Boeing's engineering and technology centre in Bengaluru is one of its largest outside the US. Apple has also ramped up its manufacturing in India, partnering with such global leaders such as Wistron and Foxconn to produce iPhones. The US e-commerce giant Amazon has invested big in India, creating its own infrastructure and supply chain to support the growing online marketplace. Cisco, a global US leader in networking and cybersecurity, has a strong presence in the country, which covers manufacturing and research and development among others.
Whimsical Trump's bid to strongly disturb the matured India-US economic and diplomatic relations may have something to do with his age. President Trump will reach 80 in next June. This may somewhat explain his growing capricious nature in dealing with the complex international issues and markedly strange utterances and suggestions slamming India and Russia as 'dead economies' after tariff stand-off and the US drilling oil in Pakistan which is 85 percent import dependent to meet its energy needs. Having road-tested a hardball tactic in his first term (January 20, 2017 to January 20, 2021), President Trump seems to have taken it to new levels. Earlier this year, a global survey found that India was the most upbeat of any nation about what a second Donald Trump presidency would mean for the country. The survey panel must be having second thoughts now. For India, it must strongly avoid falling into a Trump trap and continue to play cool. (IPA Service)
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The National
42 minutes ago
- The National
Startling new details reveal how Gazans are lured to their deaths in aid queues
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In the case of the Wadi Gaza distribution site, which is in an "evacuation zone" – an area the Israelis have told Palestinians is too dangerous to live in – people spend the night under the Wadi Gaza bridge. Others, like 35-year-old Abu Al Majd, choose to depart just after fajr (dawn) prayers. From his tent in Nuseirat, it's a 3km walk, which almost guarantees him a spot closer to the aid site, even though there is no specific time for when the distribution, which lasts for around 10 minutes at a time, begins and ends. Then, throngs of people begin arriving, pushing those in front of them as they clamour for aid. That is when the gunshots begin, under the guise of "crowd control"; and when it does, it's impossible to know where and who the bullets are coming from. "They begin their warm-up by firing at the crowds at 6am before the tanks arrive around an hour later," Mr Al Majd told The National. 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Testimonies, video footage and official statements all back up the claim that not enough is being done to prevent the sites from turning into crime scenes. Speaking to The National, a father Palestinian who had been attempting to go to a GHF site, described what he saw. "They killed a little boy, 10 metres from where I was," he told The National. "His mother and father looked on. With one bullet, both he and his uncle were shot dead. I will never forget that scene." Among the hundreds of victims was Ehab, a father of three, who left for one of the aid sites in Rafah early on June 10 and never returned. His family's calls to him went unanswered and they learnt of his fate later that day when his cousin Omar spotted Ehab in photos of unidentified victims of a shooting at aid sites who had been brought to Al Nasser Hospital in Khan Younis. "He was shot in the head," Omar told The National. The bullets are not only aimed at aid seekers but also at those who help the wounded. In a testimony to Doctors Without Borders (MSF), Mohammad Daghmeh, 24, said he was shot at 3.10am and was left bleeding until 5am. "There were many other men with me. One of them tried to get me out. He was shot in the head and died on my chest," he said. Others, such as Mahmoud Assaf, a researcher in his 40s, were terrified of what they saw on the one occasion they went to an aid site. He had left at 10am and came back at 7pm empty-handed. People, he said, were fighting like dogs over meat. When shots are fired, everybody ducks or tries to take cover. Chaos ensues. In a vicious cycle, Mr Assaf's health is exacerbated by hunger – the very hunger that is driving him to try to fetch food for his children. "They offered to go in my stead, but I couldn't bear the thought of something happening to them." The shooting, he said, seems to be at random. If they escape the bullets, pepper spray and stun grenades, aid seekers still run the risk of being trampled. The dangers are too numerous, he said. Mr Assaf, luckier than others, said he instead opted to buy aid being sold on the black market, albeit at exorbitant prices, with the cost of 1kg of flour ranging anywhere between $300 and $800, depending on the prospects of a ceasefire and the amount of aid entering the Strip. Israeli testimonies Shots fired at civilians rushing for boxes of aid containing their only source of food are being labelled as "crowd control" measures. But evidence of the carnage taking place at and around the distribution sites is widely documented in videos, testimonies and statements by members of the GHF who blew the whistle anonymously or openly. Speaking to Israeli newspaper Haaretz, several Israeli soldiers who worked at GHF distribution sites acknowledged the use of firepower, through heavy machine guns, grenade launchers and mortars, either as warning shots or to disperse crowds. "Our form of communication is gunfire," one said. "We open fire early in the morning if someone tries to get in line from a few hundred metres away and sometimes we just charge at them from close range. But there's no danger to the forces." Mr Aguilar claimed that using machineguns and military quadcopters to disperse hungry and desperate people in famine-stricken Gaza results in widespread panic and an increase in the lack of safety for them and others. He recounted numerous missteps, from bringing armed contractors like him on a tourist visa to witnessing war crimes in the form of live ammunition being used against unarmed civilians. The GHF has repeatedly rejected Mr Aguilar's claims, calling them "categorically false" and made by a "disgruntled former contractor who was terminated for misconduct". Claims of shootings are not limited to witnesses, former GHF officials and soldiers, however. 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Since Israel stopped all aid from entering Gaza in March, dozens of people, including 24 children under five, have died of malnutrition, the World Health Organisation (WHO) said. The army also clarified it is not running the GHF centres, although it "allows the American civil organisation [GHF] to distribute aid". Security of those zones is handled by the organisation," Israel's military added. But the GHF has taken a different position. Referring to a video with which the Associated Press confronted it during an investigation into its conduct, the organisation said the shots heard were not coming from them, but from Israeli forces. Israel has created an atmosphere in Gaza that has pushed people to starvation, caused prices to rise sharply to hundreds of dollars for basic necessities like flour and sugar, all the while making roads dangerous, medical assistance a rare privilege and safety almost non-existent. With almost the entire population of Gaza displaced, more than 40,000 people are crammed into a 1 square km space. To wonder why the Israeli army, or the armed guards working under its watch, are firing at hungry Gazans is to ask why the GHF has been created.
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