Donald Trump Is Engaged in a 'Low Intensity Trade War' With India, Analyst Says

President Donald Trump is engaged in a "low intensity trade war" with India, an expert said, after he issued a veiled threat to Indian Prime Minister Narendra Modi ahead of their meeting on the sidelines of the G20 Summit in Osaka, Japan.

"I look forward to speaking with Prime Minister Modi about the fact that India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn!" Trump tweeted on Thursday.

The pair are due to meet on Friday, the first day of the two-day summit of world leaders. Trump is also set to meet with China's President Xi Jinping to discuss the ongoing trade war between the world's top two economic powers.

"While global attention turns toward Osaka this weekend for the Trump-Xi meeting, India and the U.S. are engaged in a low intensity trade war," said Vasuki Shastry, associate fellow in the Asia-Pacific Programme at Chatham House, a foreign affairs think tank in London.

Shastry highlighted Trump's removal of preferential trade access for India, his administration's threat to curb work visas for Indians, and the president "feeling deeply aggrieved over Indian arms purchases from Russia."

India retaliated in June by increasing tariffs on 28 goods imported from America, its largest trading partner, including almonds, applies, lentils, and chemicals.

"The trade impasse has significant negative economic implications for India. It also undermines America's stated desire of positioning India as a strategic counterweight to China. America cannot have its New Delhi cake and eat it too," Shastry said.

Modi, who is already in Osaka ahead of the G20 summit for a meeting with Japanese Prime Minister Shinzo Abe, is yet to respond to Trump's tweet. Modi may well fire back on Twitter. Like Trump, he is an avid user of the social media platform.

The Indian economy is already struggling, and the reliability of its data brought into question by economists. Yet Modi and his ruling nationalist BJP won a landslide election in May, delivering him a larger majority in the Indian parliament.

Secretary of State Mike Pompeo was in New Delhi on Wednesday for a meeting with the Indian Foreign Minister Subrahmanyam Jaishankar. The recent trade issues were on the agenda.

"On some outstanding issues, particularly relating to trade, my urging was that we take a constructive and pragmatic view of that, which is natural—when you have trade, there will be trade issues," Jaishankar told reporters after the meeting.

"And I think the real test of our intentions is our ability to address them effectively. Where the Government of India is concerned, we are committed to making it easier to do business, to provide a level playing field, and to grow with the world economy. And striking the right balance between these concerns is what we are trying to do."

He added: "Look, if you trade with somebody, and particularly they're your biggest trading partners, it's impossible that you don't have trade issues. But I think the sign of a mature relationship is that ability to negotiate your way through that and find common ground.

"Perhaps that's not been as effective as it could and should have been in the recent past, but I think both of us are leaving this meeting convinced that we both need to tell our governments that they need to try harder and make sure this happens."

Donald Trump Modi India trade war tariffs
President Donald Trump listens to India's Prime Minister Narendra Modi during a meeting on the sidelines of the G20 Leaders' Summit in Buenos Aires, on November 30, 2018. SAUL LOEB/AFP/Getty Images
Donald Trump Is Engaged in a 'Low Intensity Trade War' With India, Analyst Says | Politics
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