Congress leader P Chidambaram on Thursday asked the BJP-led government to spell out India’s response to US President Donald Trump’s threat of a tariff war. He further alleged that no discussion in Parliament or consultation with Opposition parties has been held over the matter.

The Congress leader cautioned that a tariff and trade war would lead to depressed exports, lower FDI, higher inflation and currency depreciation.

He further suggested that India must find a common ground with saner voices in the world, such as Canada, Britain, France, Germany and Japan and collectively do everything to prevent a tariff and trade war.

Referring to Trump’s statement that the US will impose tariffs from April 2, the former finance minister said, “What is the government’s response? What is India’s response? There has been no statement of policy, no discussion in Parliament, no consultation with Opposition parties. The government is holding its cards close to its chest, if it has any cards at all."

“A tariff war will lead to a trade war. The whole world will be hurt," Chidambaram was quoted as saying by news agency PTI.

He also alleged that Finance Minister Nirmala Sitharaman, under the pressure of Trump in the Union Budget 2025-26, announced customs duty reduction on items including motor vehicles, passenger cars, goods, transport vehicles, motorcycles, bicycles and even toys.

“Is this a genuine change of heart? Is it a genuine change of policy? I don’t believe so. I think this is the effect of Mr Donald Trump. The Trump Effect has forced the government to reduce these duties," Chidambaram remarked.

The senior Congress leader alleged the central government is taking several decisions, such as the Budget speech, getting rid of the two per cent tax, the finance minister’s announcement regarding the six per cent digital service tax and the government’s reduction of customs duties, are not able to satisfy the US President.

“First they tried concessions on February 1, Mr Trump was not satisfied. They tried flattery. He doesn’t seem to be satisfied if concessions and flattery have failed and the tariffs are going to be imposed on our exports on April 2,  I want to know what is the government’s response," Chidambaram added.

He further asserted that a tariff war will be in breach of the WTO multilateral and bilateral trade agreements and international conventions. “It will wreck the world economy. It will ruin the economies of developing countries."