Days of building China factories, hiring workers in India are over: US President Donald Trump
This comes on the heels of the US releasing an AI Action Plan, which includes plans for export controls, to shore up American dominance in the global AI race and prevent 'adversaries' from getting their hands on critical AI technology. Experts said while India may emerge as a key partner for the US, the larger focus on domestic production in America and possible disruptions in global AI supply chains mean India should also focus on building up its own capabilities.
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Business Standard
24 minutes ago
- Business Standard
Tariff impact on India's iPhone exports unclear despite US exemption
American President Donald Trump has announced that even while he plans to impose 100 per cent duty on imported semiconductors and chips, companies like Apple Inc (and manufacturers of laptops and personal computers) that have their manufacturing base of critical components in the United States (US) but assemble their products (like iPhones) in foreign countries will continue to be exempt from duty. Apple Inc Chief Executive Officer Tim Cook has announced the company is increasing its investment in the US by another $100 billion-600 billion in four years. In a press conference with Cook at the White House, Trump said: 'We will be putting a tariff of 100 per cent on semiconductors and chips, but the good news for companies like Apple Inc is that if you are building in the US, we are committed not to charge them (tariffs on the final product). ' The announcement came just a few days before the report of the Department of Commerce on investigation under Section 232 (of the Trade Expansion Act), aimed at protecting national security on semiconductors and embedded products with semiconductors (mobiles, laptops, personal computers, etc), and is expected to be placed before the President soon. However, the impact of the move on India could be varied compared to what it plans to do with China. Currently tariffs on mobile phones imported from India have zero duty, but China has been slapped a fenytyl tax of 20 per cent. However, experts in the business say the advantage India has on tariffs is neutralised by two factors: The cost of producing iPhones in India is around 10 per cent higher than in China. Hence despite the production-linked incentive (PLI), there is a handicap. And, because of a vibrant supply chain, China can absorb another 10-12 per cent of the increase in cost due to tariff through subsidies from the government and the advantage of scale. The PLI scheme for mobile devices in India is ending next year and the supply chain is in its infancy. The scenario could change even more if the US removes the fenytyl tax on China, bringing it down to zero like that for India and hectic negotiations are on between the two countries to do so. Regardless of Trump's position on duty, the reality under Section 232 is that it has not imposed the same tariffs on all countries. This is evident in the differential tariffs on the United Kingdom and the European Union on various products compared to others. And considering its latest salvo against India, it could well impose a hefty duty on semiconductors for India and leave China out. In simple calculation, a 100 per cent duty effectively means a 40 per cent duty on a smartphone as 35-40 per cent of its cost of production is from semiconductors.
Time of India
30 minutes ago
- Time of India
'Really good answer?' CNN's Kaitlan Collins roasts Peter Navarro for his answer on 50% India tariff
CNN's Kaitlan Collins asked John Bolton whether Peter Navarro's explanation on 50% tariff on India was a good reply. CNN anchor Kaitlan Collins roasted Donald Trump's trade adviser Peter Navarro over the answer Navarro gave on why the president singled out India to impose additional tariff as India buys Russian oil while China also does the same. Navarro gave an answer and then said he gave a "really good answer", but back in the studio, Collins asked former ambassador John Bolton, Trump's NSA between 2018-2019, whether Navarro actually gave a good answer. "China buys more Russian oil than India does, and they have not been targeted for that. So why is India having its tariffs doubled?" Collins asked Navarro. "As the boss says, let's see what happens. Keep in mind that we have over 50 percent tariffs on China already," Navarro said. Collins then countered Navarro and said China's tariff could go up higher as a punishment for buying Russian oil going beyond the existing 50 per cent tariff. — kaitlancollins (@kaitlancollins) "So we don't want to get to the point where we actually hurt ourselves," Navarro said, patting himself on his back for giving a good question. "And I think I've given a really good answer to that. We've got tariffs 50 percent — we already have high tariffs on China. So, I take your point. President certainly will be working with China on that issue," Navarro said. Collins played the video and asked Bolton whether Navarro's answer was really good. "That shows exactly what I think could be the worst outcome for the United States, that India has reacted very negatively, as you might expect, to these tariffs related to Russian oil purchases, in part because they see that China has not been tariffed," Bolton said. "And Trump seems to be, in the minds of many China experts, setting up to treat China more leniently than he has treated India, thus putting in jeopardy decades of American effort, to bring India away from Russia, to bring India away from China, to join us in trying to push back on Chinese efforts, to gain hegemony along its long Indo-Pacific perimeter." "And the irony here is that while the secondary tariffs against India are intended to hurt Russia, it could push India back closer to Russia, and ironically closer to China, perhaps negotiating together, against the US tariff efforts," Bolton said.
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Business Standard
35 minutes ago
- Business Standard
PM draws the line amid US tariff heat, govt plans strategy for exporters
Prime Minister Narendra Modi on Thursday declared that India will 'never compromise' on the interests of its farmers, livestock rearers, and fishermen even if it means paying a 'heavy personal price', in a strong response to the United States doubling tariffs to 50 per cent on Indian exports. The prime minister's statement signalled that New Delhi is unwilling to yield under Washington's pressure for greater agricultural market access. The government, according to people familiar with the matter, is working on a three-pronged strategy to support exporters threatened by the tariff hike. One approach involves launching a sector-specific support scheme under the proposed ₹2,250 crore Export Promotion Mission. Another centres on diversifying export destinations away from the US. The third measure could see surplus products redirected to meet domestic demand if American orders decline. Speaking earlier at the M S Swaminathan Centenary International Conference, Modi said: 'For us, the welfare of our farmers is of the highest priority. India will never compromise on the interests of its farmers, livestock rearers, and fishermen. And I am fully aware that I may have to pay a very heavy price personally, but I am prepared for it.' Talks between India and the US on an interim trade deal collapsed last month with disagreements over American dairy products and genetically modified crops proving insurmountable. In Washington DC, White House trade advisor Peter Navarro described India as the 'Maharaja of tariff'. Defending US President Donald Trump's decision to impose an additional 25 per cent levy on Indian goods for New Delhi's purchase of Russian crude, Navarro said the move was driven by national security concerns. 'The rationale for the Indian tariff is very different from the reciprocal tariff. This was a pure national security issue associated with India's abject refusal to stop buying Russian oil,' he said. Earlier on August 1, the Trump administration had imposed a 25 per cent reciprocal tariff on Indian goods, on top of existing World Trade Organization-compatible duties. Asked whether countries importing petroleum products from India could also face similar tariffs, Navarro said: 'We are looking at that all. It's got to stop. American dollars buy Indian products and that sets in motion where those dollars finance (Russian) war which then requires American taxpayers to pay for defending against the Russian armaments. That kind of trade doesn't work.' Three-pronged strategy A person aware of the three-pronged support plan for exporters said schemes will be 'tailor-made to specifically support sectors that will be adversely affected by the substantial hike in tariff'. 'There should be a focus on diversification of the export market, since disrupted world trade also creates opportunities. The Department of Commerce and the export promotion councils are closely analysing and looking for opportunities in regions other than the US,' the person said. Exporters have warned that the US tariff hike is a significant blow, directly impacting nearly 55 per cent of India's exports to the American market. Apparel and leather exporters are expected to be the hardest hit, especially as this is the period when orders for the summer season are placed. On Thursday, exporters from the textiles and chemicals sectors met senior officials from the commerce and industry ministry to seek assistance. It is estimated that around 6 per cent of the industry will be directly affected by the higher tariffs. 'The textile sector is one of the worst hit since it is a labour-intensive sector. Orders are generally long-term in nature, making the switch to export market diversion tricky,' a person familiar with the discussions said. Exporters from these sectors have requested a five-year extension of the Rebate of State and Central Levies and Taxes (RoSCTL) and the Remission of Duties and Taxes on Exported Products (RoDTEP) schemes. They also called for a reduction in the compliance burden associated with the advance authorisation scheme and a cut in port charges. Industry estimates suggest that 20 products in the chemicals sector will be adversely affected, accounting for around 75 per cent of the $6 billion worth of exports to the US. The US remains India's largest destination for merchandise exports. In FY24, India exported goods worth $86.5 billion to the US, an increase of 11.6 per cent over the previous year, while imports stood at $45.7 billion, resulting in a trade surplus of $40.8 billion.
