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India Tries End Run Around Duties; Trump Targets Tit-for-Tat Tariffs By Paul Berger

India is scrambling to reset its tariff posture ahead of a potential tit-for-tat trade war.

The world's largest democracy is especially vulnerable to reciprocal tariffs President Trump is vowing to impose on countries with the heaviest levies on U.S. goods. That's because India's tariffs on imports average 14%, compared with 6.5% in China and 1.8% in Canada , the WSJ's Tripti Lahiri reports. Trump in his first term called India the "tariff king."

India is increasingly seen by U.S. retailers and manufacturers as an alternative to China. Prime Minister Narendra Modi wants to keep it that way and is introducing a series of tariff cuts intended to head off reciprocal duties. Modi, in advance of a visit to Washington this week, introduced tariff cuts including for smartphone components that will benefit manufacturers such as makers of Apple's iPhones and for materials used in electric-vehicle batteries.

India also cut duties on foreign motorcycles such as Harley-Davidson bikes. Finance officials have said they are reviewing tariffs on other product lines.

India exported about $87 billion worth of goods to the U.S. last year, or about $45 billion more than it bought from the U.S., its largest trading partner.

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Economy & Trade

Trump's plans for reciprocal tariffs likely mean his campaign pledge of across-the-board tariffs is off the table. In its place will be a more complex system of country-by-country duties. The WSJ's Gavin Bade writes that the strategy, expected to be unveiled today, could hit a slew of trading partners beyond those like India and Argentina that have high tariffs in place.

People close to Trump say the administration wants to base the tariffs on factors that include taxes on American companies, including value-added taxes, and regulations that prevent U.S. companies from doing business overseas. That means nations such as Japan and members of the European Union could be targeted by higher U.S. tariffs and countries such as China - which has a lower average tariff rate than the U.S. but a number of nontariff barriers - might face additional import duties.

Mexico's leader is writing the playbook for handling Trump in trade talks. (WSJ) Japan and Australia are asking for an exemption from U.S. tariffs on steel and aluminum. (WSJ) Canadian companies are deferring spending because of uncertainty around tariffs. (WSJ) Why tariffs will make car insurance even more expensive. (WSJ) China's top chipmaker, Semiconductor Manufacturing International, says clients are stockpiling inventory and asking to move up delivery of orders. (Nikkei Asia) Quotable Number of the Day In Other News

Consumer prices in January rose a brisker-than-expected 3% from a year earlier. (WSJ)

Air-safety officials want to keep helicopters away from jets at the Washington, D.C., airport where 67 people died last month in a crash. (WSJ)

Australia is prepared to bring the country's third-largest airline, Regional Express, under state ownership . (WSJ)

Stop & Shop grocery chain owner Ahold Delhaize said U.S. sales and profitability fell in the fourth quarter. (WSJ)

Ray-Ban maker EssilorLuxottica posted higher fourth-quarter sales fueled by strong growth in North America and China. (WSJ)

Ryder System recorded a profit of $135 million in the fourth quarter , up about 1% on the same period in 2023. (Dow Jones Newswires)

Houthi rebels in Yemen are threatening to resume attacks on shipping in the Red Sea if the truce between Israel and Hamas is broken. (Splash 247)

Two U.S. Navy ships sailed through the sensitive Taiwan Strait in the first such mission since Trump took office. (Reuters)

Containerships are backing up off the coast of Bangladesh because of a wave of strikes that affected the Port of Chittagong. (The Loadstar)

A labor dispute is causing disruptions at the Port of Rotterdam. (Marine Insight)

Congestion is causing delays returning containers at the Port of New York and New Jersey. (Journal of Commerce)

Norwegian car carrier Wallenius Wilhelmsen said net profit rose 30% in the fourth quarter from the year prior to $290 million. (TradeWinds)

U.S. trucking companies are planning to spend less on equipment and real estate as they focus on price and profitability. (Fleet Owner)

Heathrow Airport is pushing ahead with plans for a third runway and new terminals at the U.K.'s busiest air hub. (The Times of London)

Japanese automaker Isuzu will invest $280 million to create a new manufacturing plant in South Carolina. (WBTV)

Amazon is planning an almost five-story, 3.2 million-square-foot distribution center near Albany, N.Y. (Business Journals)

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

February 13, 2025 07:06 ET (12:06 GMT)

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