'India should reduce tariffs', says US Commerce Minister

In a statement, US Commerce Secretary Howard Lutnick affirmed that India, being one of the highest in the world, will have to think of reducing tariffs. The US, in his view, has a wide range of trade benefits it would enter into with India instead of $80 billion worth of bilateral trade product deals for trade expansion. 

While speaking to India Today Television, he was quoted saying, “We will treat you the way you treat us.” India does charge one of the highest averages of tariffs in the world, and this is something that needs to definitely change specially in light of the so called special relationship that India shares with US. 

On the other hand, he said that India is overprotective; for instance, its exports are low tariffed by the US, hence, this balance level has to be modified. Latnik's comments stem from his conversation with India's Commerce and Industry Minister Piyush Goyal during their meeting in Washington earlier this week. Goyal had met members of Trump’s administration prior to the implementation of the equalization tax on April 2.

Both the United States and India seek to complete a beneficial trade deal in the upcoming 7-8 months. Earlier today, the Indian Ministry of Foreign Affairs stated that they are looking to expand trade with the United States, which can be done by eliminating certain tariffs with a bilateral trade agreement. When Prime Minister Modi visited the United States last month, both nations came to terms that a bilateral trade agreement would be established. 

India will have to make major concessions by opening the agricultural sector, but Latnik remained bold that India would allow these changes. “It’s simplistic to conclude that there is no flexibility in negotiations. There is even room for discussion around how trade is done and which products have quotas and ceilings.” he stated. 

Since Donald Trump assumed office, he has repeatedly claimed that there is a need to implement policies that support American goods manufacturing and new job growth for the United States workforce and attempt to solve the worrying trade deficit.

In addition to imposing equal tariffs, the US intends to target international tariffs, taxes, and non-tariff barriers by placing tariffs on steel, aluminium, and automobile imports. New tariffs are already in place for Chinese exports, while Mexico and Canada are also set to face new tariffs. 

India and China have often received Trump’s critique of high tariff barriers. During his last public address, he mentioned that the current barriers are low and not permanent, but will be set at equal levels after April 2. 

According to Nomura, The US charges 9.5 percent of American goods shipped to India while India charges only 3 percent.