Mumbai: US President Donald Trump had appealed to the European Union (EU) to impose up to 100 percent tariffs on India and China so that pressure could be put on Russia. But according to a Reuters report – this is almost impossible. Europe believes that putting tariffs will increase legal complications and may also put the ongoing Free Trade Agreement (FTA) talks with India at risk. That’s why the EU is currently not in the mood to take any step on Trump’s appeal.
President Donald Trump is continuously taking new steps to put pressure on Russia. As part of this, he told the European Union that India and China, who buy the most oil from Russia, should be imposed with up to 100 percent tariffs. But EU officials have clearly said that doing so is not possible.
Why won’t the EU agree with Trump?
Long legal process – The EU usually does months of investigation before imposing tariffs so that it can be legally correct.
FTA talks with India – India and the EU are currently trying to finalize a big trade deal. In such a case, imposing tariffs can harm relations.
Uncertain results – The EU feels that imposing such large-scale tariffs would be risky and its effects could be very wide.
What has happened so far?
In July, the EU listed two Chinese banks and one Indian refinery in its previous package.
So far, the EU has only imposed tariffs on fertilizers and agricultural products coming from Russia and Belarus.
Now preparations are going on for the 19th package, in which banks from Central Asia and some Chinese refineries could be listed.
Good news for India
This position of the EU is a big relief for India. Even though Trump is talking about imposing tariffs on India to weaken Russia, but the EU’s stand is clear that India will not be targeted. This is also important for India because New Delhi and Brussels are trying to finalise the Free Trade Agreement (FTA).
Trump’s softer stand
Interestingly, Trump’s stance on India became softer on Wednesday. He said that he wants to reset trade relations with India and is eager to talk to PM Modi.
What it means for investors and the market
The EU will not impose tariffs on India, which will bring relief to the export sector.
Especially textile, IT, and engineering companies will benefit, whose big market is Europe.
Now the market’s eyes will be on the India-EU FTA talks, which, if successful, can bring long-term benefits for Indian companies.
