Originally, it was expected that the US and India would soon reach an agreement, but India suddenly became very firm towards the US, which has already surprised the US. However, India has pioneered a new approach to the trade war!

On July 5th, according to foreign media reports, India officially announced that New Delhi stated that Washington imposed a 25% tariff on Indian cars and some car parts, which will impact India's exports worth $2.89 billion.

Seeing the US's determination to impose additional taxes on India, the two sides could not reach an agreement, so India immediately took two countermeasures. First, India has notified the World Trade Organization (WTO) that it plans to impose retaliatory tariffs on certain US products in response to the US violating WTO rules.

India solemnly stated that the US's practice of imposing tariffs violates WTO rules and has a significant impact on bilateral trade. India has suspended equal tariff reductions according to WTO rules, while reserving the right to adjust the list of target products and tariff levels.

Evidently, India is responding directly to the US's tariff bullying, and this makes India the second country after China to explicitly warn the US about serious violations of WTO rules and prepare for retaliation against the US. Just by standing up to the US, India deserves our respect.

Secondly, India further stated that the total tariff the US imposes on India will reach $725 million, and India will impose equivalent tariffs on products originating from the US. On July 4th, India's Minister of Commerce and Industry, Goel, stated that the trade agreement India is prepared to reach needs to be in line with its national interests, rather than just to reach an agreement before the deadline.

In the Sino-US trade war, the US imposed taxes on us, and we retaliated against the US accordingly. However, India's approach to taxing the US is a move we have never taken, which is to impose equivalent tariffs on products originating from the US.

What does this mean? It means if the US imposes a total tax of $5 billion on India, India will also impose a $5 billion tax on goods coming from the US. We are matching the tax rate, whereas India's response to the US is matching the tax amount. By fighting the trade war in this way, India is the only country in this trade war that has done this to the US.

Face with India's direct response, the US must be feeling cold sweat. Why say this? According to the Trump administration's "reciprocal tariff" policy, if no agreement is reached between the US and India after the July 9th grace period, the US will impose a 26% tariff on all imported Indian goods.

However, this 26% tariff has not been fully implemented yet. In other words, now India has already stated that it will retaliate against the part of the taxes the US imposed on it. If the US does not reach an agreement with India and fully imposes tariffs on Indian goods, India may also fully retaliate against the US. And India has actually stated that it reserves the right to adjust the list of target products and the level of tariffs.

India's full-scale retaliation is one aspect, but the US is most worried about the complete change in India's attitude towards the US. Everyone knows that, in the context of the Sino-US rivalry, the US strategy is to court India to balance us. If the US-India tariff negotiations completely collapse, there will inevitably be huge changes in US-India relations.

In fact, India dares to take a hard stance against the US because it believes it is important to the US. In India's understanding, the US should open its market to India, transfer technology, and increase investment in India to maintain US-India relations. How can the US set up trade barriers against India?

Moreover, another requirement of the US on India will shake the basic support base of Modi, which the Modi government cannot accept at all. The US's demand is that India further open its market and accept genetically modified corn and soybeans and other agricultural products.

India is a country with a large population and a major agricultural country, with as many as 672 million rural people. If India opens its market to American agricultural products, America's modernized agriculture will undoubtedly have a huge impact on India.

Actually, since Modi came to power, he has introduced some policies for farmers, such as crop insurance programs and agricultural subsidies. In 2024, Modi signed an order to distribute the 17th batch of agricultural subsidies, benefiting 93 million people.

If Modi compromises on this critical issue with the US, it would be extremely detrimental to his next election. Therefore, Modi has no choice.

Evidently, facing such a strong India, this greatly surprises Trump. For the US, dealing with India is not just a tariff issue, but also involves the US's Indo-Pacific strategy. In short, India holds a strategic card that the US must play, which is India's strength!

(End of article)

Original: https://www.toutiao.com/article/7523576343594926619/

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