Call for trade war with the United States, can India lose?

NEW DELHI, KOMPAS.com – Last weekend, India announced the imposition of tariffs on products from the United States, triggering heightened trade tensions between the two countries. However, the decision was considered prejudicial to India itself.

Report of CNNTuesday (18/06/2019), the imposition of tariffs on 28 types of products from the United States, including almonds, apples and a number of chemicals, was effective Sunday (16/06 / 2019). The Indian government said the policy was a response to US tariff policies for Indian steel and aluminum products.

"India's decision to retaliate by increasing tariffs is a miscalculated strategy." India's major trade negotiations with the United States will result in losses rather than losses. benefits, "said Priyanka Kishore, head of Indian economists at Oxford Economics.

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Like China, India has recorded a surplus in its trade balance relative to the United States. In other words, India exports more products to the United States than it imports.

The value of Indian exports to the United States reached $ 54 billion in 2018. At the same time, imports from the United States reached $ 33 billion.

"If the United States chooses to respond by applying a countervailing rate for the export of labor-intensive products such as gems, jewelry and textiles, or computer pressing services, that will hurt the (Indian) economic outlook, "said Kishore.

US President Donald Trump has repeatedly pointed to the US trade deficit against India. Trump also pointed to the high rates applied by India to motorcycle and alcohol products from the United States.

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The US government recently withdrew India from a list of preferential trading programs, due to numerous complaints from the medical industry and livestock in the United States. This program releases US $ 6 billion worth of Indian goods from the US import duties.

India imposes tariffs on US products because India holds Uncle Sam's acces card US companies monitor the size of the Indian market, especially the large sector distribution and 600 million internet users who attract giants like Amazon, Facebook, Google and Walmart.

However, India does not have as much counterattack power as China. The country Bamboo Curtain applied tariffs on US products and threatened to blacklist foreign companies.

"If (the tension of the American and Indian trade wars) increases, we will not have a negotiating position comparable to that of China.We always have the possibility of withdrawing, if it will affect our interests in China. future, "said Rajat Kathuria, Indian director of Research Council on International Economic Relations.