Trump's 'Reciprocal Tariffs' post sets stage for meeting with PM Modi

Washington, D.C.: Hours before his much-anticipated meeting with Indian Prime Minister Narendra Modi, U.S. President Donald Trump took to Truth Social to make a bold announcement on trade tariffs. His early morning post on Thursday (6:46 AM EST, 5:16 PM IST) left little doubt about what would dominate their discussions—import duties and trade policies.

"THREE GREAT WEEKS, PERHAPS THE BEST EVER, BUT TODAY IS THE BIG ONE: RECIPROCAL TARIFFS!!!" Trump declared, emphasizing his long-standing position on tariffs as a tool for economic leverage.

What Are Reciprocal Tariffs?

Trump’s ‘reciprocal tariffs’ policy follows an "eye-for-an-eye" approach—imposing equivalent tariffs on countries that charge import duties on American goods. On Wednesday, the White House hinted that this policy could be officially announced before Trump’s meeting with Modi, marking a major shift in U.S. trade strategy.

India-U.S. Trade Talks: A High-Stakes Meeting

Modi arrived in the U.S. earlier on Thursday for his first bilateral meeting with Trump since the latter’s return to the White House in January. The meeting comes at a critical juncture, as both nations navigate economic policies affecting key industries.

Trump's recent 25% tariff on steel and aluminum imports has already sent shockwaves through India’s markets, causing a steep drop in the Sensex. India, a major aluminum producer, relies heavily on U.S. exports, making the new tariff a pressing concern for Modi's administration.

Deportation Row and Trade Concessions

Beyond tariffs, immigration policies have also sparked tensions. Recently, the U.S. deported 104 undocumented Indian immigrants under strict conditions, an action that caused an uproar in India.

In an attempt to ease trade tensions, India recently lowered import duties on American goods, including high-end motorcycles, luxury cars, and smartphone components. This move is expected to benefit major U.S. companies like Harley-Davidson, Tesla, and Apple. However, Indian Finance Minister Nirmala Sitharaman clarified that these reductions were part of broader economic reforms, not a direct response to Trump’s tariff threats.

Trump’s History with Trade Tariffs

During his first term (2017-2021), Trump implemented similar tariffs but later granted duty-free quotas to key allies such as Canada and Mexico. While the U.S. initially saw a rise in manufacturing jobs, the sector faced a downturn by 2019, with industrial production declining.

As Trump enters his second term, his stance on trade appears to be more aggressive, with India being one of the primary targets. The upcoming meeting with Modi will be a crucial moment in defining the future of India-U.S. trade relations.

With the world watching closely, the outcome of this high-profile meeting could set the tone for global trade dynamics in the coming years.