Analysis Shows India is Not the Biggest Tariff Imposer on US Goods
Former US President Donald Trump’s latest rhetoric about India being a “tariff abuser” is more political than economic. A detailed analysis of US trade data reveals that India is not among the top offenders when it comes to imposing high tariffs on American exports.
Trump, in his address to the US Congress, once again accused India of imposing over 100% tariffs on US imports, particularly on automobiles. However, a closer examination of trade patterns between 2022 and 2023 reveals that only 0.4% of all US non-oil exports face duties above 60% worldwide.
Key Facts That Challenge Trump’s Tariff Narrative
Less Than 1% of US Exports Face High Tariffs
- Out of $1.88 trillion worth of US non-oil exports to 155 countries, only 0.14% of the products faced tariffs of 100% or more.
- Just 92 countries imposed duties of 60% or more on any US goods.
India Ranks Ninth, Not First, in High Tariffs on US Goods
- The top five countries imposing high tariffs on US exports are:
- South Korea
- Canada
- Mexico
- Japan
- Thailand
- India comes in at ninth place, behind China, Guatemala, and the Dominican Republic.
- The top five countries imposing high tariffs on US exports are:
Most US Exports to India Face Lower Tariffs
- India’s latest budget has already reduced customs duties, with tariff lines of 100%, 125%, and 150% eliminated.
- In 2023, 75% of all US exports globally faced less than a 5% tariff.
Trump’s “Reciprocal Tariff” Argument Lacks Economic Justification
During his speech on March 4, Trump announced that his administration’s “reciprocal tariff plan” would take effect from April 2, aiming to ensure “fair trade”.
“Other countries have used tariffs against us for decades. Now it’s our turn to start using them against those countries,” Trump said.
However, Trump’s claim that countries like India charge the US “tremendously higher tariffs” than what the US imposes in return is misleading.
- The European Union, China, Brazil, India, Mexico, and Canada were explicitly named as countries that impose higher duties on American goods.
- Yet, data does not support his assertion that India is the worst offender.
India’s Tariff Policy Is Aligned with Global Trade Practices
- India, like other nations, uses customs duties strategically to protect its domestic industries.
- In recent years, the Indian government has reduced import duties to align with World Trade Organization (WTO) standards.
- Many Indian tariff rates are also comparable to or lower than those imposed by other large economies.
Tariffs on US Exports: The Bigger Picture
US Exports Facing Over 60% Tariffs (2022-2023):
| Country | Percentage of US Goods Facing Over 60% Tariffs |
|---|---|
| South Korea | 23% |
| Canada | 22% |
| Mexico | 17% |
| Japan | 9% |
| Thailand | 8% |
| China | 6% |
| Guatemala | 5% |
| Dominican Republic | 4% |
| India | 4% |
This data clearly shows that India does not have the most restrictive tariff policies on US exports.
India’s Import Duties on Automobiles: A Target for Trump?
One of Trump’s biggest grievances is the high import duty on American cars.
- India imposes 100% import duty on fully built-up cars (CBUs).
- However, this only applies to luxury vehicles that are imported as a complete unit.
- For cars assembled in India (CKD units), the duty is much lower at 15-30%.
- Many European and Asian countries also have high tariffs on imported vehicles, meaning India is not an outlier in protecting its auto industry.
Trump’s Tariff Rhetoric: Political or Economic?
Trump’s aggressive stance on tariffs has been a hallmark of his “America First” trade policy. His latest comments come ahead of the 2024 US Presidential elections, where tough trade talk resonates with his voter base.
However, global trade experts argue that such tariff wars are counterproductive:
- Retaliatory tariffs from affected countries could hurt US exporters, including farmers and manufacturers.
- Higher import costs could increase inflation in the US.
- India and other nations have already taken steps to lower tariff barriers.
Conclusion: India Is Not the “Tariff Abuser” Trump Claims
- Data shows India is not the worst offender in imposing tariffs on US goods.
- India’s ranking is ninth, far behind countries like South Korea, Canada, and Mexico.
- Recent policy changes have reduced India’s import duties, further weakening Trump’s argument.
As Trump pushes his “reciprocal tariff” plan, India and other global trade partners will likely seek diplomatic resolutions to maintain strong economic ties with the US. Instead of escalating trade tensions, collaboration and negotiations may be the more sustainable path forward.
