The latest list of tariff hikes has 18 iron and steel items, a potent political reply against Trump’s tariff hikes in the sector. However, the government has dropped ‘motorcycles above 800cc’ from the list after giving strong hints that it would do so. This would have effectively made imports of high-end motorcycles such as those made by US major Harley-Davidson’s more expensive. Despite India importing only about $10 million worth of bikes in the category in 2017-18, Trump has used the company as an instrument to attack India on alleged market access issues.
However, in terms of real import value based on last financial year’s trade, agricultural commodities such as apples and almonds are to hit. The US is the largest exporter to India of both items and US exporters of chickpeas, lentils, walnuts, and artemia (brine shrimps) may find contracts getting cancelled owing to higher import duties on these products.
“This increase will be in addition to raising new trade barriers, make domestic manufacturing more attractive as the steep increases in Customs duties may make imports unaffordable. For agri products such as pulses, which have witnessed an increase from 30 per cent to 70 per cent, this would provide encouragement in increasing the cultivable area, on the back of the good pulses production in recent years,” M S Mani, indirect tax partner, Deloitte India, said.
The global trading mechanism has been shaken up by $34 billion worth of tariff hikes announced by both the US and China last weekend. Since then, Trump has threatened an additional $200 billion worth of tariffs on Chinese goods and Beijing has indicated it won’t buckle down.