Donald Trump hints at new tariffs on Indian rice and announces $12 billion in aid for US farmers. Will Trump impose new tariffs on rice from India? Let us know what effect this will have on India-US trade.
New Delhi. There has been a sudden statement in American politics which has alerted India and many countries of the world. US President Donald Trump has clearly said that he is “looking” at imposing new tariffs on rice coming from India. He says that “dumping” of Indian rice, i.e. selling it in the US market at very low prices, is hurting American farmers. Not only this, Trump has also announced a huge help of 12 billion dollars (about Rs 1 lakh crore) for American farmers. This help has been announced at the same time when rice prices are continuously falling in the US and farmers are under pressure. So are tensions going to increase again in India-US trade relations? Can tariffs really be imposed on Indian rice? And how big a loss can this be for India?
Trump’s statement – rice, tariffs and increasing trade dispute
During a meeting at the White House, Trump claimed that Indian rice and other agricultural products were being sold in the US market at very low prices. He called it “dumping” and said it was becoming a big challenge for domestic farmers. He said: “They shouldn’t be dumping. I’ve heard it, I’ve heard it from others. You can’t do that.” That means Trump is clearly indicating that he is serious about this matter and some big step forward is possible. Along with this, there was also talk of imposing additional tariff on fertilizers coming from Canada. This clearly shows that Trump is moving towards tightening his trade policy again and this can have a direct impact on India.
Are American farmers troubled by dumping of Indian rice?
The increasing import of Indian rice into the US is becoming a challenge. American farmers are constantly complaining that crops coming from countries like India, Vietnam and Thailand are cheaper than their crops. Because of this, the price of rice in the US is falling and farmers’ profits are decreasing. Trump said, “Imports are creating problems for domestic producers, and we intend to resolve this issue.”
$12 Billion Farmer Package: Will American farmers benefit?
Trump has prepared a $12 billion farm aid package to help farmers. Of this, $11 billion will go to one-time payments to farmers with line crops, while $1 billion will cover other crops. Trump said that this help will be part of the revenue collected from tariffs imposed on imports. The main objective of this package is to provide relief to American farmers and save them from agricultural crisis. Trump said the tariffs he recently implemented are the largest in nearly a century and the revenue from them will be used to fund farmer aid and federal spending.
Will the new tariffs affect India-US trade deal?
After Trump’s signal, the question arises whether this can become a matter of concern for India? Earlier this year, the US administration had imposed tariffs of up to 50% on Indian goods. Also included was an additional 25% levy on oil purchases from Russia. India described this action as unfair and wrong. Both the US and India are negotiating a bilateral trade agreement. So far five rounds of talks have taken place. Officials of both the countries have indicated that a trade deal can be done soon. New talks are also expected with the American delegation coming to India this week.
Is there a big threat to India’s rice industry?
India is the world’s largest rice exporter. There will be a direct impact of increase in tariff on US-
- exports will be expensive
- Demand for Indian rice will decrease in US
- Earnings of farmers and millers will reduce
- That means this decision can prove to be very important for India.
Trump’s warning: Will there be tariffs on fertilizers from Canada too?
Not only India, Trump also hinted at imposing tariffs on fertilizers coming from Canada. He said that if necessary, tariff will be imposed as this will strengthen the domestic market.
Will this farmer package and tariff improve the situation?
Will $12 billion in aid be enough for farmers? Will the new tariffs affect the India-US trade deal? And will new rules on Indian rice imports come into effect soon? Only time will answer all these questions.