Overview of US Trade Policies Under President Trump
The "golden age of America" is marked by President Trump's aggressive "America First" trade policy. This includes targeting China and restructuring trade deals with countries like Mexico and Canada.
Challenges and Opportunities
- The main challenge is managing the expanding US trade deficit, which was $1.05 trillion in 2023.
- Major contributors to the deficit include:
- China: 30% or $318 billion
- Mexico: 19%
- EU: 16%
- Canada: 15%
- India's contribution is smaller at 3.2% with a trade surplus of $33 billion.
India-US Trade Dynamics
- The trade relationship varies significantly by product category:
- Primary goods: US imports $13 billion, exports less than $1 billion.
- Consumption goods: India exports $27 billion to the US, imports $2 billion.
- Capital goods: US exports $6 billion, imports $8 billion from India.
Strategic Partnerships and Supply Chains
The Indo-Pacific Economic Framework for Prosperity (IPEF) presents opportunities for India in supply chains, clean energy, and infrastructure.
The US Quadrennial Supply Chain Review 2023 focuses on strategies to counter non-market policies and practices, primarily by China, and emphasizes the importance of trade traceability.
Implications of a US-China Trade War
- Potential challenges for India include:
- China targeting new markets, possibly increasing competition for Indian exports, especially in Africa.
- The risk of dumping Chinese goods in India.
India's Role in the US Services Sector
- India's significant presence in the US services sector is reliant on the H-1B visa program.
- Recommendations for future growth:
- Simplification of the H-1B visa process.
- Increased focus on professional services and MRO services.
- 72% of H-1B visas are granted to Indians, with China's share at 12%.
Strengthening India-US Relations
Continuous dialogue and enhanced institutional mechanisms are essential for elevating the India-US partnership, ensuring alignment across trade, investment, technology, and finance.
