Washington trade groups are holding their breath after President Donald Trump announced a tariff hike on India, bringing the combined levy on the Asian country to 50%.
Trump issued an executive order earlier this week that would double the existing 25% duty on India in retaliation for the country's purchases of Russian oil. The hike goes into effect 21 days from the signature unless the two countries work out a deal.
The U.S. tariffs could hit the Indian economy hard, with some analysts estimating a 1% decline in its gross domestic product, according to Bloomberg. U.S. businesses and consumers also will have to contend with higher prices on Indian imports. U.S. imports from India totaled $87 billion last year, according the Office of the U.S. Trade Representative.
In Washington state, news of the additional levy on Indian imports has earned mixed reactions from trade groups and businesses. Some have taken a wait-and-see approach, including the Washington State Department of Agriculture, which declined to speculate on future impacts of duties.
Others expressed concerns that the hike could harm Washington's trade ties with India, reviving memories of past trade tensions during the president's first term that hit Washington agriculture exports, particularly apples.
India is the state's ninth-largest trading partner by container volume and 10th largest by vessel value, according to the Northwest Seaport Alliance, which oversees marine cargo operations at the ports of Seattle and Tacoma.
Washington's top import commodities from India include textiles that aren't considered clothing, along with stone, plaster and cement, some machinery, shellfish, and furniture. Meanwhile, the top exports include apples, paper and paper board, legumes, and scrap metal, according to Northwest Seaport Alliance spokesperson Kate Nolan.
During Trump's first term, Nolan explained, India implemented a 20% retaliatory tariff on American apples in 2019 in response to U.S. tariffs, which pretty much decimated the India apple market" for Washington exporters, Nolan said.
India's retaliatory duties boosted prices on agricultural products, which increased costs for Indian customers and "resulted in loss of market share," she said. "Customers just found new suppliers, and it's very difficult to regain market share once lost."
As such, "India is one of the best examples of what can happen to our local ag market when tariffs and retaliatory tariffs are issued," she said. "Though consequences aren’t always immediate, they are both pervasive and hard to undo."
Lori Otto Punke, president of the Washington Council on International Trade, agreed that there's been some pullback from trade between the U.S. and India in the apple sector in particular.
India lifted the retaliatory tariffs on Washington apples last year.
"You still only have a real trickle of what that bilateral trade used to be," said Otto Punke.
Still, "Washington state has had a long relationship, particularly on the agriculture front, with India," she said. Beyond apples, the trade relationship also encompasses other produce markets, such as cherries, pears, chickpeas and lentils.
On top of that, her association estimates that 40% of jobs in Washington are tied to international trade. Fluxes in trade relationships result in uncertainty — for those workers, as well as business owners and consumers.
"There's a lot of concern," Otto Punke said. "It's a really rough environment right now anyway, so this just adds to it."
Broader tariff concerns
Trump's sweeping tariffs that were announced against dozens of countries in April, then paused, took effect Thursday, leaving trade partners scrambling and local businesses bracing for impact.
Emily Ritchie, executive director of the Northwest Cider Association, which represents regional cidermakers, elaborated on the anxiety among small businesses.
"Every time a tariff is proposed, cideries in the Pacific Northwest have to be nimble and make sure their inputs are secure," Ritchie wrote in a statement. Those inputs include aluminum, steel and apples.
According to the Washington Apple Commission, the state's growers harvest 10 to 12 billion apples annually. Those apples are often exported.
"Anytime a tariff is imposed, our industry is affected due to the global reality of our market," Ritchie said. "Our cideries in the (Pacific Northwest) make up $1.1 billion in economic impact to our region, so that will also have a trickle down effect."
However, another industry association is reaping short-term rewards from Trump's tariff strategy.
"At the moment, producers have not seen a negative impact from the tariffs," said Jack Field, executive director of the Washington Cattle Feeders Association, a trade group representing cattle feeders. "If anything, we've seen some short-term, pretty positive things in the marketplace."
That includes the potential reduction of the foreign ground beef supply coming into the U.S., which would boost the domestic value of cows fated for the grinder.
"People are seeing (that) right now, with increased value of cows at record-high level," Field said in a phone interview.
Still, "exports play a critical role in the marketing of a beef animal," he explained.
Recently, beef prices have hit record highs, due to drought, costly feed and low numbers of cattle, which have left American consumers in a pinch — and created demand for local ranchers.
The beef industry has maintained strong consumer demand in the U.S., Field said. "Our demand has almost outpaced some segments of production," he added.
Other trade groups don't rank the tariffs as a top priority to tackle.
"Tariffs really don’t affect our small-business-owning members in a big way," wrote the National Federation of Independent Business, which has a presence in Washington, in a statement. "On our list of 75 Small Business Problems & Priorities, importing comes in 74th and exporting 75th."
Consumers impact
If the additional tariffs against India take effect, Washington consumers, including those from India, are likely to feel the squeeze.
Spice imports in particular may see higher prices. Last year, the U.S. imported more than $410 million in spices from India, according to the U.S. Department of Agriculture.
"The diaspora will be impacted because spices and food products they get from India will definitely be hit," Sital Kalantry, director of the Roundglass India Center at Seattle University, said in a phone interview.
She added that she wouldn't be surprised if Seattleites are already stocking up on their favorites.
Raj Poudyal, owner of Seattle-based Mayuri International Foods, hasn't had that happen yet across his five Indian grocery stores. Instead, his customers are biding their time, he said.
"We haven't seen any panic," Poudyal said. "There are people who are talking about it, but they're still kind of getting into the mode of, 'Hey, let's wait and watch.' "
Mayuri International Foods imports 80% of its nonperishable product from India, Poudyal said, so it would affect his business if the tariff doubles on the Asian country.
"That will definitely impact all of our product, which is coming from India," he said. "It will be, definitely, a challenge."
For now, Poudyal has inventory stocked up. He hopes the U.S. and India reach a trade deal to avoid the increased levy.
"We are just waiting to see, Poudyal said.
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