‘Make in India won’t be replaced by Make in US’: Ex-commerce secretary slams Trump tariff math as ‘bizarre’

‘Make in India’ is not under threat from the US’s new reciprocal tariffs, former commerce secretary Anup Wadhawan said on Thursday, dismissing fears that America could reclaim its manufacturing edge. “It is not as if that Make in India is now going to get replaced by Make in the US. That is not going to happen,” he said in an exclusive interview with Business Today Editor Siddharth Zarabi.

According to Wadhawan, the American economy simply isn’t structured to support large-scale manufacturing. “Any sort of manufacturer in his right mind will not find the American environment conducive today. Not on account of factors like high costs in the American economy, labor is expensive. There’s some estimate that an Apple phone made in the US would cost about $3,000 to $4,000.”

Wadhawan’s comments came as Trump imposed a 27 per cent “reciprocal tariff” on Indian goods, citing India’s alleged high duties on American products. The former bureaucrat said the new tariff regime had little basis in actual trade math. 

“To say that India has been charging 52% tariffs has no basis in reality,” he noted. “Our average tariffs applied on US goods were in the range of about 12 odd per cent. And American tariffs were about 3 odd per cent. So there was a differential of 9 per cent…But he’s adopted an interpretation which is totally bizarre and unexpected and not based on reality.”

Yet, Wadhawan saw silver linings. He pointed out that many of India’s competitors like Vietnam, China, Bangladesh, Thailand, and Malaysia were being hit with even higher tariffs. Key sectors like pharma, energy, copper, and semiconductors are also exempt. “Many of our electronic products like Apple phones, where 80 per cent of the value is American IP, will also escape the worst,” he said.

Wadhawan predicted that the tariffs would ultimately hurt American consumers. “There is not likely to be much domestic supply response in the US,” he explained. “In Trump’s first term, when he imposed duties, the American domestic supply response was very weak and the American citizens ended up paying more. The trade deficit actually worsened with China. That is what will happen again.”

Wadhawan suggested that Trump’s real goal is to use tariffs as leverage. “That is the only method in the madness,” he said. “But it’s a very inefficient method. He’s going to drag everyone to the negotiating table and then try to extract something out of them.”

Reflecting on the broader impact, Wadhawan said the world has now formally moved away from the global trade norms defined under the WTO. “Even before this event, the global economic order as conceived under the WTO had been abandoned. This is in a sense the final stamp on that abandonment,” he said.

He added that the global economy could now split into two zones: a high-tariff zone centered around the US and a low-tariff bloc made up of the rest of the world. “That is a big chunk of the world economy — it is 75 per cent of the world economy. Economic activity will shift into this low tariff rest of the world zone,” he said.

As for India, Wadhawan downplayed fears of long-term disruption. “Our exports to the US are only about two per cent of our GDP,” he said. “Had we been the only one facing duties, we’d have been concerned. But others are worse off. The price and the tariff will in large part be absorbed by the US. We’ll feel some pain, but it’s not going to be overly burdensome.”

Wadhawan also made it clear that India’s Aatmanirbhar Bharat goals remain intact. “The US is not a major manufacturing power and they are not in a position to become one,” he said. “So manufacturing is not going to shift into the US as President Trump is conceiving it. India has nothing to worry in terms of these steps harming our goal of promoting the manufacturing sector in India.”