Could India Be The Next Target For A US Trade War?

The world’s stage and those performing on it change with each passing leader. Between George W. Bush and Barack Obama, American foreign policy took a vastly different turn. Donald Trump has been commander in chief for two years now and he has already changed tack on how the United States handles itself with relation to trade with those countries who are keen to gain a slice of the superpower’s trading potential.

Trump has already made waves by teetering on the brink of a trade war with China as he threatened to increase tariffs massively for Chinese imports, which will also result in greater tariffs for the US to pay. Could India be the next on the list to face Trump’s protectionist policies?

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The US Begin Looking At Trade With India

The US and India are extremely cohesive when it comes to matters of security and geopolitics, but their economic policies are often at odds. Attempts to ascertain a trade deal have recently dissolved and the prognosis looks as bad as it does between the US and China. American businesses are opposed to regulations India has implemented involving data storage, e-commerce and online content regulation.

The US has also urged India to cut off any trade with Venezuela in protest to the Maduro government, asking them to refrain from purchasing Venezuelan oil, which India has taken umbrage with. As the trade war intensifies, the results can actually be monitored in real time, especially through the changes to stock and share prices for companies directly related to the trade levies proposed by Trump.

Once the domain of economists, now the average citizen can keep track of the possible effects of trade tariffs. Using stock trading software can provide real-time feedback as the economy reacts to diplomatic decisions, so the impact of each development can be monitored.

India Threatens To Retaliate

India itself is unhappy with some of the moves the protectionist Trump government has made. Namely, the crackdown on handing out H-1B visas to India citizens. This would stymy the technology sector staff who hail from India and wish to work in and contribute to the tech landscape of the US. As outlined in his campaign trail, Trump has also upped tariffs on steel and aluminum from India in order to give US steel a better chance at flourishing again. But, instead of giving a leg up to his own country, the President has irritated a useful and powerful ally in India.

Protectionism is the order of the day it seems, as the next spate of Indian elections will see Prime Minister Narendra Modi outline a protectionist outlook himself. Trump’s government wants to stamp out unfair trade practices, which he states come from workers being taken advantage of in other countries, specifically India. Currently, Indian goods are protected, with a large amount being imported into the US without having to pay any duty.

Should Trump wish to escalate the trade war, we could see this coming to an end. This would result in retaliation from Modi, especially as he seeks re-election. The global stage will shift should Trump continue his trade wars – rather than benefit the US in the ways he expects, the country could risk alienating some of its most useful allies.

Trump’s sights remain in the Far East, while he also continues to take shots at trade with Canada. It’s difficult to suggest how the India-US trade war may develop, but both sides are itching to take umbrage with one another and the tit for tat could result in an all-out trade war.

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IMAGE: PEXELS