A Big Trade Problem Between Two Countries
Once upon a time, not long ago, the leader of the United States, President Trump, got upset with a country named India.
Why was he upset? Because India was buying a lot of oil from Russia at a good discount. So, President Trump decided to punish India by making Indian products much more expensive to sell in America.
He added a special tax, called a **tariff**, of 50% on most things coming from India. Think of it like this: if an Indian company sold a shirt for $10 in the U.S., Americans would now have to pay an extra $5 just as a tax to their own government. That makes the shirt $15, and much harder to sell.
This was a very big problem because America is India's biggest customer. India sells about $86.5 billion worth of stuff to the U.S. every year. Now, about two-thirds of those products have this huge new tax. This puts many jobs in India in danger, especially in industries like clothing, jewelry, seafood, and leather.
A smart woman named Garima Kapoor explained, "With such a high tax, no product from India can be competitive anymore." Other experts said this could slow down India's entire economy.
People in India were already worried about finding jobs. This new tax could make the unemployment problem much worse, affecting millions of workers.
There was some good news: India's huge medicine industry, and its electronics and oil products, were safe from this new tax. But for many other businesses, the future looked tough.
A former trade official in India, Ajay Srivastava, predicted that sales to America from the affected industries could fall by a shocking 70%. Another man, Kirit Bhansali, who sells gems and jewelry, said, "This is simply an earthquake."
India had saved a lot of money—about $17 billion—by buying cheaper Russian oil. But Mr. Srivastava said the damage from these new U.S. taxes could be more than double that savings.
So, what did India's leader, Prime Minister Narendra Modi, do? He asked all Indian people to help by buying products made in India. His government also planned to lower taxes inside India to make everyday items like food and clothes cheaper for its own people. They were also preparing a big financial aid package to help the struggling exporters.
India is also trying to find new friends to sell its products to and recently signed a trade deal with the United Kingdom. But business owners said it's not enough. They asked the government for help with their expensive bank loans.
Prime Modi knew times were tough. He said the world is in an age of "economic selfishness," where every country puts itself first. But he promised that India would stay strong. "No matter how much pressure there is," he said, "India will continue to build its strength to withstand it. India is ready to pay a huge price to protect its own interests."
And so, the two countries found themselves in a difficult standoff, showing how connected—and sometimes complicated—the global economy can be.
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