Trump fires fresh trade salvo a day ahead of G20 meeting with Modi

New Delhi: Indian tariffs imposed in retaliation to the withdrawal of preferential trade terms by the US are unacceptable and must be reversed, US President Donald Trump said on Thursday, just a day ahead of a meeting with Prime Minister Narendra Modi.

In a Twitter post, Trump demanded the withdrawal of tariffs imposed on 28 goods earlier this month, adding that he was looking forward to discussing the matter with Modi when they meet on the sidelines of the G20 Summit in Osaka, Japan, on Friday.

“I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high tariffs against the United States, just recently increased the tariffs even further. This is unacceptable and the tariffs must be withdrawn!” Trump’s tweet read.

The comment comes a day after US secretary of state Mike Pompeo held talks with external affairs minister Subrahmanyam Jaishankar in New Delhi during which the two agreed on the need to work out differences keeping the larger perspective of their strategic partnership in mind.

Pompeo said the US wanted greater market access and removal of trade barriers, adding that he addressed these differences “in the spirit of friendship”. “We will keep working to resolve any economic disputes,” he said.

Jaishankar, on his part, said: “My urging was that we take a constructive and pragmatic view of that. It is natural that you will have trade issues and I think the real test of our intentions is our ability to address them effectively.”

Pompeo and Jaishankar will be present at the Trump-Modi meeting. The two leaders were later to meet with Japanese Prime Minister Shinzo Abe in a trilateral format, signalling a partnership of major democracies.

Analysts in New Delhi said Trump’s statement was a pressure tactic. It also illustrated that the strategic part of the India-US relationship was not in sync with the trade part. While the strategic side showed convergence on issues such as terrorism and the need for closer defence interaction, the economic side of the relationship needed to be worked on.

Earlier this month, India slapped tariffs on 28 US products exported to India, after Washington withdrew its long-standing trade concessions for India on 1 June. Trump said the preferential status had allowed India to sell goods worth $5.6 billion duty-free. The US move was in line with Trump’s policy of reducing trade deficits, that is, equalizing the import and export between the US and others nations.

Trump has an eye on a strong domestic constituency: In his election campaign, for instance, he said the US purchases more from other nations than it sells, which, he claimed, has stunted domestic manufacturing.

Then there are differences between India and the US on data localization—New Delhi demands that data generated in India be stored within the country. US companies have also been complaining about the lack of market access in India as well as other barriers in the way of trade.

According to a recent US State Department fact sheet, “There is enormous potential to grow our trade relationship and create the high-quality jobs that Prime Minister Modi wants if India lowers trade barriers and embraces fair and reciprocal trade.” It also emphasized that the Trump administration was working to ensure “American companies operating in India have the same level playing field that Indian companies enjoy in the United States”.

Separately, Modi held talks with Japan’s Abe soon after his arrival in Osaka on Thursday. The talks included exchanges on the India-Japan bilateral relationship as well as the agenda of the G20 meet, foreign secretary Vijay Gokhale told reporters. Modi’s proposal for the G20 to act on the problem of economic offenders finding refuge in other countries found favour with Abe, Gokhale said. Abe was of the view that the G20 should deal with this problem as part of its anti-corruption measures, he said.

“The prime minister of Japan also referred to the need to find appropriate situations for global trade and data flows. And he felt that the G20 should come up with a constructive message on climate change,” the foreign secretary said. “These were areas that the prime minister of Japan hoped that he would get the understanding and support of the G20 members, including India.”