“We know firsthand that the additional tariffs will have a significant, negative, and long-term impact on American businesses, farmers, families, and the U.S. economy. An escalated trade war is not in the country’s best interest, and both sides will lose.”

On Sunday, India officially imposed higher tariffs on 28 U.S. products including almonds, apples, and walnuts in retaliation for Washington’s decision to strip India of trade privileges. New Delhi did not increase tariffs on similar products from other countries.

On June 5, President Donald Trump annulled India’s trade privileges under the General System of Preferences (GSP). According to Al Jazeera, India had been the biggest beneficiary of the GSP scheme, allowing the country to export $5.6 billion worth of goods duty-free to the U.S.

India is the U.S.’ biggest almond buyer, accounting for more than half of U.S. almond exports (worth an estimated $543 million). Data from the U.S. Department of Agriculture showed that India is the second biggest buyer of U.S.’ apples, worth $156 million in 2018.

The trade dispute started when Washington refused to exempt India from high tariffs on aluminum and steel. Then, India issued an order to increase taxes up to 120 percent on several U.S. products in June last year. However, India repeatedly postponed the increase of tariffs as both countries were involved in trade negotiations.

Trump has repeatedly imposed tariffs on India’s products, such as motorcycles and whiskey. The implementation of taxes on India’s products came after complaints from U.S. farmers and health device manufacturers stated that the Indian government tariffs had hurt U.S. exports.

The Trump administration has repeatedly used tariffs as a tool to force other countries to compromise with Trump’s “America First’ policies. Trump has been in a trade war with China and has threatened to slap 25% tariffs on $200 billion worth of Chinese products. Most recently Trump threatened a trade war with Mexico in order to force the country to devote more resources to stemming the flow of immigration to the U.S.

Trade Wars and the US Economy

Some analysts believe the trade war between the U.S. and China has harmed the U.S. economy. Global investment bank Goldman Sachs stated the tariffs imposed by the Trump administration has negatively affected U.S. businesses and households by forcing consumers to pay higher prices.

A Newsweek report commented on the perceived negative effects of Trump’s trade war, stating:

“Oxford Economics said that the Trump administration’s decision to raise tariffs from 10 percent to 25 percent on $200 billion of Chinese goods, which was announced last Friday, would cost the economy $62 billion in economic output.”

More than 600 companies and trade associations, including Target, Gap, Levi Strauss and Walmart sent a letter to Trump urging the Trump administration to end import tariffs on China and resolve the ongoing trade tension.

“We know firsthand that the additional tariffs will have a significant, negative, and long-term impact on American businesses, farmers, families, and the U.S. economy. An escalated trade war is not in the country’s best interest, and both sides will lose,” the letter said as CNN quoted on Friday.

If Trump slaps a new tariff on all remaining items from China, many analysts warn the impact will be severe. According to a report commissioned by the National Retail Federation, Americans would pay an extra $2.5 billion more for shoes and $1.6 billion more for household appliances and $ 4.4 billion for clothing a year.

“The U.S. economy will be flirting with recession later this year and early next,” Mark Zandi, chief economist at Moody’s Analytics, told Yahoo News.

Washington’s threat to slap a 5 percent tariff on goods from Mexico was seen as a threat to American jobs, especially in Texas. No less than 400,000 job opportunities in the U.S. would vanish if the trade war between the two neighboring countries starts, according to an economic forecast from The Perryman Group.

“To impose tariffs on all goods from our largest trading partner will cause significant cost increases and other harms to the economy,” Ray Perryman, the CEO of the Perryman Group, stated in the report. “The fallout could be much greater over time.”