India Raises Tariffs, Escalating Trade Fight With Trump

India announced late Saturday that it would raise tariffs on 28 categories of imports from the United States, the latest escalation in what has been a slow-motion trade fightbetween the two countries.

The increased tariffs, on $1.4 billion of goods, went into effect Sunday morning in India and cover almonds, walnuts, apples and finished metal items, among other products.

Unlike other trade battles that President Trump has waged, such as the increasingly bitter feud with China, the conflict with India threatens far less economic pain to either country.

Tariffs on almonds, for example, will go up about 20 percent under the new rules — but that translates into a wholesale price increase of about 4.5 cents a pound for almonds in the shell, according to industry officials. India is one of the largest markets in the world for almonds from California, which produces most of the global supply, but growers are more focused on wooing Indian shoppers from locally grown nuts like cashews than on the trade duties.

India first proposed the tariffs a year ago in response to the Trump administration’s increased tariffs on imported aluminum and steel.

But the Indian government kept postponing the duties as it tried to negotiate a broader trade agreement with Washington. Those talks broke down as India headed to elections this year.

At the end of May, President Trump announced he was revoking a preferential trade status for more than $5 billion in imports from India, a move that American officials had been considering for over a year. That prompted India to finally move forward with its long-threatened tariffs.

The tit-for-tat response allows both countries to signal that they are being tough on trade before two bilateral meetings this month: first a visit by Secretary of State Mike Pompeo to New Delhi, and then a planned meeting between Mr. Trump and India’s recently re-elected prime minister, Narendra Modi, at the G-20 summit meeting in Japan at the end of June.

Those conversations are also expected to address more substantive disputes between the countries, such as the American embargo on Iranian oil and India’s planned purchase of Russian-made S-400 air defense systems.

Source: The New York Times