Trump puts tariffs at the heart of US economic policy

Washington, Dec 18, (IANS) US President Donald Trump asserted that tariffs will remain a central pillar of his economic policy, a stance that could complicate trade ties with several nations as Washington presses companies to shift manufacturing to the United States.

In his year-end address to the nation on Wednesday (local time), Trump repeatedly credited tariffs for spurring investment, factory construction and job growth, framing import duties as a permanent tool to reshape global trade rather than a short-term negotiating tactic.

“Much of this success has been accomplished by tariffs,” Trump said, calling them his “favourite word,” and arguing that companies were returning to the US in “record numbers” because goods made domestically face no import duties.

Trump said tariffs had already helped secure a “record-breaking $18 trillion of investment” into the United States, linking the inflows directly to trade barriers that reward domestic production and penalise imports.

“If they build in America, there are no tariffs,” Trump said, arguing that decades of trade practices that favoured foreign exporters at the expense of US industry were over.

The remarks sharpen expectations that scrutiny of imports will intensify, including from major trading partners such as India. Indian exports to the US include pharmaceuticals, steel, aluminium, auto components, chemicals, textiles and information technology hardware.

For Indian firms, the message signals a clear choice: absorb higher trade costs or expand manufacturing and assembly operations inside the United States.

Trump positioned tariffs not only as an industrial policy tool but also as a revenue source, saying tariff collections helped finance tax cuts and other spending initiatives, including a newly announced “Warrior Dividend” payment for US military personnel.

“We made a lot more money than anybody thought because of tariffs,” he said, reinforcing the administration’s view that trade duties can support domestic fiscal priorities.

Trump also framed reshoring as a national security imperative, tying factory openings to “far greater national security” and arguing that private-sector job creation, rather than government expansion, was key to American strength.

For India, which has sought to position itself as an alternative manufacturing hub amid shifting global supply chains, the US turn inward presents mixed signals. While companies may diversify production away from some regions, Trump made clear that his preferred destination for investment remains the United States itself.

India and the US have expanded cooperation across defence, technology and critical supply chains in recent years, but trade has remained one of the most sensitive areas of the relationship.

The US remains India’s largest trading partner, and American officials have increasingly described India as a key partner in diversifying supply chains and reducing economic concentration risks.

India has sought greater access for its goods and services while resisting pressure to sharply lower tariffs across the board. Trump’s remarks suggest that tariff levels will remain a central issue in any future talks.

lkj/sd/