Trump cites India as example to defend his tariff decision

US President Donald Trump today cited India as an example of those countries imposing 100 per cent tariffs on American products and defended his decision to impose retaliatory tariffs on foreign goods to address the huge trade imbalance with the European Union, China and India.

Trump's remarks came ahead of the next week's maiden 2+2 dialogue between India and the US. External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman will be in the US for talks with their American counterparts Secretary of State Mike Pompeo and Defence Secretary James Mattis.

Experts here hope that the dialogue will help change the current narrative surrounding the bilateral relationship amid trade issues.

Trump has repeatedly raised the issue of high tariffs by India on high-end Harley-Davidson motorcycles, which in part is responsible for the current trade tension between the two countries.

"We have countries where, as an example, India, they charge up as much as 100 per cent tariff. We want the tariffs removed," Trump said.

In February, Trump had said that the Indian government's decision to reduce the tariff on Harley-Davidson motorbikes from 75 per cent to 50 per cent was not enough and asked that it should be reciprocal, as the US imposes "zero tax" on the import of motorcycles.

Trump defended his recent decisions to impose tariffs on import of foreign products by arguing that this is in retaliation to the imbalance of trade that the US has with major trading partners including China, the European Union and India.

"What I would like to do and what I offered at the G7, you remember, I said let's drop all tariffs and all barriers,” he said.

"Is everybody OK with that? And nobody said yes. I said wait a minute folks, you're complaining. No tariffs and no barriers, you're on your own, let's do it. And it was like they couldn't leave the room fast enough," he said recalling his conversation with G-7 leaders in Canada recently.

"Other countries are negotiating (with the US). Without tariffs, you could never do that. If they don't want to negotiate, then we'll do the tariffs," Trump told reporters at the White House.

"We lost USD 500 billion last year with China. We lost USD 151 billion with the European Union, which puts up great barriers so that our farmers can't trade," he said.

Trump said his policy to impose import tariffs on selected items is yielding results. "Tariffs can be a very positive thing," he said.

"The bottom line is, we have charged a very substantial tax to some people.  They are coming back to negotiate. And, frankly, if they don't negotiate, I'm okay with that because I'd rather get the tax," he said in response to a question. Trump said tariffs helped to revive the steel industry which was at the bottom.

"With China, if we send a car to China, they charge us a 25 per cent tax. So we make a car, we send it to China, we want to compete. That's not free trade.  That's stupid trade," Trump said.

"So, we send 25 per cent tax. When they make a car in China, and they send it here, we charge them 2.5 per cent.  So we get 2.5 per cent; China gets 25 per cent.  That's not fair.  That's not free. That's just stupid," he said.