Subhechcha Ganguly 
Former Finance Minister and senior Congress leader P. Chidambaram on Thursday cautioned the government against an impending tariff and trade war, allegedly triggered by former U.S. President Donald Trump. Initiating a discussion on the Finance Bill in the Rajya Sabha, Chidambaram claimed that Trump has informed Prime Minister Narendra Modi of his plan to impose reciprocal tariffs starting April 2.
Calling tariffs the “elephant in the room,” Chidambaram questioned the Modi government’s response to this looming threat. He argued that the recent customs duty cuts on various products, announced in the Union Budget 2025-26, were not a result of a policy shift but rather influenced by Trump’s stance. “The Trump Effect has forced the government to reduce these duties,” he asserted.
He warned that a full-scale tariff war could wreak havoc on the global economy, particularly harming developing nations like India. “If tariffs are imposed despite the Prime Minister’s praise for Trump, what is the government’s response? A trade war will lead to a drop in exports, reduced FDI, higher inflation, and currency depreciation,” he said, criticizing the Centre for failing to consult Parliament or the Opposition on the issue.
Chidambaram urged India to align with “saner voices” in the world, including Canada, Britain, France, Germany, and Japan, to prevent a global trade conflict.
Further attacking the government’s economic policies, he highlighted concerns such as rising unemployment, inflation in essential sectors like food, education, and healthcare, stagnant wages, and increasing household debt. He accused the Modi administration of “mercilessly cutting budgeted expenditure” on critical sectors, including health, education, and rural development.
The government has yet to respond to Chidambaram’s concerns.
