Background on Tariff Decision
US President Donald Trump has just announced high tariffs on Indian imports. US Commerce Secretary Howard Lutnick commented on this decision, saying that the tariffs had been introduced for diplomatic reasons. He explained that it was an effort to use trade policy to help stop the ongoing war between Russia and Ukraine.
Secretary Lutnick’s Explanation
In an interview with Fox News, Lutnick explained that President Trump pulled this move to further justice and security across the world. He explained further that it's not just about tariffs; it's a tool used to shape behavior around the world. Lutnick further explained that Trump has already called on India to cease buying oil from Russia.
Legal Context and Political Implications
He said this at a time when the courts are considering whether tariffs under the International Emergency Economic Powers Act are legal. India was among countries that came under the tariff purview. He also added that such restrictions would undo the president’s powers under the said act to safeguard the interest of the United States and the community of the world as a whole. Lutnick believes that in these legal tussles over the tariff issue, Trump will emerge victorious.
Impact on US-India Relations
In criticism of India's continued trade with Russia, the US imposed a 50 percent tariff on Indian oil imports. A move that has invariably harmed the good relations between the two countries, though both governments are in discussion in reaching a new US-India Trade Agreement.
Prospects for a Trade Deal
Official sources said that talks are moving in a positive direction and the finalization of a trade deal is possible shortly. In case of success, the tariff of 50 percent may be reduced to 15–16 percent, indicating improved economic relations between the two nations, the US and India.
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