No outrage over Trump’s ‘dead economy’ jibe, Goyal subdued in RS

The much-awaited statement by Union commerce minister Piyush Goyal on the bumps in reaching a trade deal with the United States turned out to be a damp squib. The minister read out a prepared statement in the Rajya Sabha late on Thursday afternoon.

He, however, made no reference to US President Donald Trump’s flurry of snide social media posts over the past 24 hours, in which he unilaterally imposed a 25 per cent tariff on India ‘plus penalty’ for buying oil from Russia. On the contrary the minister stated that India is hopeful of reaching a ‘fair, balanced and equitable’ trade deal with the United States.

Much of this was said in the brief statement released by the Press Information Bureau (PIB) on Wednesday evening, hours after the US President fired the first of his several posts. The minister refrained from commenting on Trump’s later posts in which he had contemptuously said he could not care less about what India and Russia intended to do with their ‘dead economies’.

Goyal, however, claimed that India remained a bright spot, was contributing 16 per cent to global growth in trade, and that Indian exports had increased during the past 10 years.

He also repeated that the implications of the recent statements emanating from Washington DC were being examined; and that the government was committed to upholding national interest and the interests of farmers, workers, exporters and entrepreneurs.

There was little outrage in India over Trump describing the Indian economy as dead. The reaction to his announcing ‘massive investment’ in Pakistan to build up the oil reserve of India’s arch enemy and adding that ‘who knows, Pakistan may one day supply oil to India’ was muted too.

While the benchmark index Sensex plunged 300 points at the end of a volatile day of trading in the Bombay Stock Exchange, there was no reaction from the government to either Trump's contemptuous posts or to the punishing tariff he announced.

Congress veteran P. Chidambaram posted on X: “The 25 per cent tariff on all Indian exports to the United States PLUS penalty for buying Russian oil is a big blow to India’s trade with the U.S. ‘Dosti’ is no substitute for diplomacy and painstaking negotiations. The tariff imposed by the U.S. is a clear violation of the WTO rules. What happened to MIGA + MAGA = MEGA?”

With Trump’s announcement, India now faces one of the steepest US tariff regimes. In comparison, Vietnam faces 20 per cent tariffs, Indonesia 19 per cent and Japan 15 per cent. Significantly, Trump announced a deal with South Korea also on Wednesday, and a tariff of 15 per cent on exports to the United States.

While, as Trump himself acknowledged, trade with India constituted a very small percentage of the total US trade, the higher tariff would affect India’s bargaining ability. Sectors expected to be most impacted include garments, pharmaceuticals, gems and jewellery, automotive, and petrochemicals — areas that form a significant part of India’s exports to the US.

Trump’s tariff tweets on Truth Social remain a mystery because while the total trade deficit of the United States is approximately $1,200 billion, its trade deficit with India is a paltry $45 billion. In comparison, the US has a trade deficit worth $295 billion with China and $235 billion with the European Union. So, the sudden flurry of shocking and snide social media posts targeting India seems to have little to do with economic or trade policy and driven more by personal pique.

Multiple reports from Washington DC, including one from Seema Sirohi in the Economic Times, indicate that Trump wanted to negotiate directly with Prime Minister Narendra Modi. He apparently wanted a telephonic conversation to get Modi to agree to his wish list, but wiser after his February 2025 visit to Washington DC, Modi is believed to have played hard ball. Commentators speculated that this is what prompted Trump to go ballistic.

In February 2020, Modi had introduced Trump to a stadium full of people in Ahmedabad with these words: "Ladies and gentlemen, I present to you my friend, a friend of India, a great American president, Mr Donald Trump!" Modi had also invited Trump to a rally of the Indian diaspora in Houston and had famously exhorted them to vote for Trump, saying ‘ab ki baar, Trump sarkar’. Unfortunately for both, Trump lost the election In November.

In 2024, however, during Trump's election campaign, the Indian prime minister visited the White House but did not find the time to call on Trump, who had declared that the Indian PM, ‘an old friend’, would be meeting with him. Could that be the reason why the US president is giving his old friend a hard time? When did the two friends speak to each other last? Can Modi pick up the phone even now and negotiate a mutually respectful trade deal is the question.