Letter to BS: Trump's imposition of reciprocal tax is a political ploy

A nominal benefit from the imposition of a 25 per cent reciprocal tax on trade with India has no substantial commercial benefit for US

This refers to “Trump: India charges high tariffs, want reciprocal tax” (March 4). This statement cannot be taken at face value given the continued political leaning of US foreign policy towards trade and commerce. The country’s imposition of 25 per cent tariff as a reciprocal tax on import trade of select items with India against the Indian approach of first charging a 100 per cent duty and later reducing it to 50 per cent after a “two minute” talk is only because of its internal political lobbying in the wake of its fast approaching elections. The imposition of reciprocal tax on trade with India is thus both a commercial and political ploy to divert internal attention without damaging its commercial relations externally. The US today realises that political and trade relations are mutually cohesive. A nominal benefit from the imposition of a 25 per cent reciprocal tax on trade with India is only incidental and has no substantial commercial benefit for US. India, too, does not stand to lose on commercial ties.

The US also cannot do away with import of software along with its related technological expertise from India. Further, as of today, it no longer possesses global dominance. Although there is a temporary thaw in its trade relations with China, it has become a global irritant obstructing smooth flow of established export and import ties whether directly or indirectly. It also cannot make a blanket statement that other economies are underperforming in comparison to it as it is not justified.

C Gopinath Nair, Kochi

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