CRF Blog

Trump’s Mini-Trade War with India

by Bill Hayes

The Peterson Institute for International Economics (PIIE) looks at Trump’s Mini-Trade War with India.

India has long been a challenging trading partner for the United States. And in the World Trade Organization (WTO), it has wavered between a begrudging participant and a full-scale obstructionist. Successive US administrations have tried to pry open its markets by offering trade concessions to get it to play by the multilateral rules, with limited success.

President Donald Trump is now reversing course, as he has on most trade issues, seeking instead to punish India with tariffs. Since the beginning of 2018, his administration has increased duties on 14 percent of India’s exports to the United States. India has recently retaliated by slapping new tariffs on about 6 percent of US exports to India, including $600 million of almonds from California.

There are key parallels with the Trump-China trade war. The largest is skepticism that Trump’s escalation intends to fix problems in the trade relationship. Despite the obvious differences with China—that it is smaller both as a trade relationship and a tariff conflict—the worry is that this is just another excuse for the self-proclaimed “Tariff Man” to impose even more duties on yet another country. [more]