Chidambaram Warns Against US Tariff War, Urges Govt To Clarify India's Response: 'We'll Be Ruined In...'
He highlighted that India should place its interest first, and also see that several countries are discovering a common ground acknowledging that unilateral tariffs imposed by the US are unacceptable.
Congress leader P Chidambaram urged the central government to clarify India's response to US President Donald Trump's tariff war threats, alleging that no discussion in parliament or consultation with Opposition parties has been held regarding the issue.
He stressed on the need to find a common ground with other nations that have the same concerns in pushing back against Trump's approach. He also warned that if Trump picks out individual countries and begins applying different tariffs, the affected countries would be left to fend for themselves.
"Suppose President Trump picks India and says, 'these are the tariffs from goods exported from India', we'll be ruined. In a matter of three to six months, our economy will be ruined," the Congress leader said.
In an interview to NDTV, Chidambaram, who was Union finance minister under the United Progressive Alliance (UPA) government, stated that if the Indian government's belief is that US is taking inconsistent steps, then it must formulate a policy to counter that.
"I mean, it can't be in uncertainty. Of course, Americans are uncertain, let's assume so. But you must have alternative scenarios. What if they take one step forward? What is our response? What if they take two steps backward? What is our response? And that response need not be made public to the whole world, but at least there must be a statement in parliament, or there must be a consultation with opposition parties. We are completely in the dark," Chidambaram told NDTV.
"In fact, my information is, most ministers are in the dark. Who is involved in making this reactive policy to America's uncertain policy? I don't know. Nobody seems to know," he said.
This comes as Trump announced his decision to impose a 25 per cent tariff on all auto imports, which has cast uncertainty over India's $7 billion of exports to the US, sparking fears of squeezing margins. The new tariffs are set to take effect on April 2 and would be applied to all imported automobile and car parts.
While India is not a major exporter of cars to the US, Tata Motors' luxury car subsidiary Jaguar Land Rover (JLR) has a significant presence in the American market. It is anticipated that Indian auto component firms will be hit the most as they export substantial components to the US.
Nearly a fifth of the revenue of India's auto component sector is derived from exports, from which 27 per cent lies with the US market alone.
"I think the government is making sort of impromptu, unilateral, knee-jerk decisions. For example, in the Budget speech, they got rid of the 2 per cent tax. Day before yesterday, the finance minister announced that the 6 per cent digital service tax, popularly known as the Google tax, will go. Now, what more are they going to concede to Mr Trump?" Chidambaram said.
"If you don't wish to have a public discussion in parliament, then you should at least invite the principal opposition parties which are represented in parliament and take leaders into confidence of what alternative scenarios are being worked out," he added.
Chidambaram Says Trump Will Pick Countries And Force Them To Surrender
Chidambaram then went on to defend his comment that most ministers remain in the dark on the tariff matter.
"I think at the moment, only the external affairs minister and perhaps the commerce minister who went on a delegation to the US are privy to what is going on. I don't think other ministers know. I'm sure the agriculture minister does not know. I'm sure the industries minister does not know. But they are making concessions? I don't know. Are you making concessions on agriculture? Are you making concessions on industrial goods? Are you making concessions on intellectual property? I don't think anybody knows," the former Union finance minister said.
He highlighted that India should place its interest first, but recognise that several countries are discovering and acknowledging that unilateral tariffs imposed by the US are unacceptable.
"There are WTO rules; there are multilateral and bilateral trade agreements; there are international laws and conventions. So if you want to rewrite the tariffs of several countries, you must hold a discussion. This is what Prime Minister Mark Carney of Canada is doing. He has taken his parliament into confidence, at least the leaders into confidence. And he says we will coordinate with the European countries and respond to Mr Trump's unilateral tariffs," Chidambaram said.
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"Now, I'm sure the oil producing countries are also coordinating among themselves. We are a major agricultural exporter. We are a major textile exporter. We also export a lot of industrial goods. So we must band together with countries which are in the world market for agricultural exports, textile exports, and industrial goods exports, and evolve a common approach. You see, if he [Mr Trump] picks one country at a time, and imposes tariffs, it will ruin the economy of that country.
"Suppose he picks India, and he leaves other countries out. Suppose President Trump picks India and says, 'these are the tariffs from goods exported from India', we'll be ruined. In a matter of three to six months, our economy will be ruined," he said.
Chidambaram further expressed concern that Trump would not group countries together and impose tariffs and rather decide it on the basis of the average weighted trade tariff and "force them to surrender one by one".
"I'm afraid Mr Trump is not going to group all the countries together and impose universal tariffs. He's giving a number for each country, what they have calculated, I'm told, calculated as the average weighted trade tariff. And he's going to pick one by one and force them to surrender. If he does that, and if he picks India, other countries will say, 'we have not been picked up'. So unless you take action to forestall such picking out countries, and imposing tariffs, you'll be left high and dry after the first attack," Chidambaram said.
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