Key Takeaways:

o             US President-elect Donald Trump has warned that the US will impose reciprocal tariffs in response to high tariffs on American goods.

o             Trump specifically criticized India’s 100% tariff on certain US products, calling it unfair and indicating that the US will respond by imposing equivalent tariffs.

o             Trump’s comments align with his broader "America First" trade policy, which prioritizes fairness and reciprocity in trade relations.

US President-elect Donald Trump has sent a strong message to countries imposing high tariffs on American goods, stating that the United States will impose reciprocal tariffs in response.

Trump emphasized the concept of "reciprocal" trade policies, reiterating that if a country like India imposes high tariffs on US products, the US will respond in kind. "The word reciprocal is important because if somebody charges us — India, we don’t have to talk about our own — if India charges us 100%, do we charge them nothing for the same?" Trump stated. "You know, they send in a bicycle and we send them a bicycle. They charge us 100 and 200. India charges a lot. Brazil charges a lot. If they want to charge us, that’s fine, but we’re going to charge them the same thing."

Trump's remarks, made during a news conference on Monday in Florida, come amid ongoing discussions on global trade policies with BRICS countries like India and Brazil.

Trump's comments focused on India’s tariff policies, especially its 100% tariff on certain US goods, which he criticized as unfair. "They tax us, we tax them. And they tax us. Almost in all cases, they’re taxing us, and we haven’t been taxing them," Trump said. He argued that fairness in trade is essential and that the US should not continue to be at a disadvantage in trade relations.

The US President-elect's statements are seen as a reflection of his commitment to a more aggressive, "America First" trade policy, one that prioritizes reciprocity and fairness in dealing with international trading partners. Trump's comments come as he prepares to take office, with trade being a central theme of his administration’s foreign policy.

Trump's pick for Commerce Secretary, Howard Lutnick, echoed his boss's stance, stating that "reciprocity" would be a cornerstone of the new administration's trade strategy. "How you treat us is how you should expect to be treated," Lutnick said, reinforcing the idea that the US will no longer tolerate one-sided trade practices.

India’s Tariff Policy Under Scrutiny

India has long imposed high tariffs on certain imports, particularly in the agricultural and automobile sectors. It is a key trade partner for the United States, with its share of the American market growing from 10% in 2010-11 to 18% in recent years. Bilateral trade between the two countries exceeded $120 billion in FY24, and India has become an increasingly important export market for the US. However, Trump’s remarks indicate frustration over an imbalance in the trade relationship, with the US bearing the brunt of high tariffs while offering lower duties in return.

Major export categories from India to the US include textiles, electronics, and engineering goods.