Concerns rise as the U.S. presses India for trade agreement or risk higher tariffs, impacting bilateral trade talks.
Trump Warns India of Potential 25% Tariffs Amid Trade Negotiations
Trump Warns India of Potential 25% Tariffs Amid Trade Negotiations
President Trump's stern ultimatum could reshape India-U.S. trade relations as deadlines loom.
In a recent statement, President Donald Trump warned that India might face tariffs as high as 25% if a trade deal is not finalized this week. While meeting with reporters, Trump acknowledged India's longstanding friendship with the U.S. but underscored that India has imposed some of the highest tariffs globally, leading him to take a firmer stance. "Yeah, I think so," he replied when asked about the likelihood of imminent tariff increases without an agreement. The U.S. has established an August 1 deadline for several countries, including India, to negotiate a trade pact or incur penalties.
Trade talks between Indian and American officials have been ongoing, oscillating between optimism and caution on both sides regarding an announcement. When pressed on the negotiations, Trump remarked: "We're going to see. India has been a good friend, but you just can't do that," in reference to India's tariff policies. The U.S. has already designated India as a "tariff king" and accused it of taking advantage of trade relations.
Despite the heightened tension, India has been defensive over its tariff rates, advocating for the protection of its agricultural sector, citing food security and the livelihoods of millions of small farmers as paramount concerns. In April, Trump announced tariffs of up to 27% on Indian goods, although this was subsequently put on hold as talks progressed.
U.S. Trade Representative Jamieson Greer emphasized the constructiveness of discussions with India, but noted that the Indian market has a long history of protectionist policies. One of the primary sticking points in negotiations has been agriculture and dairy access, where the U.S. has sought greater involvement in India's vast market, one that India is reluctant to open due to protective laws governing farmers’ welfare.
Indian Commerce Minister Piyush Goyal expressed optimism about potential developments, mentioning positive advancements in talks with the U.S. He affirmed India's commitment to safeguarding agricultural interests, reiterating that India has made strides in reducing tariffs on certain goods, yet the U.S. continues to experience a significant trade deficit.
With bilateral trade between the two countries having reached $190 billion in 2024, Trump and Modi have set ambitious targets of expanding this figure to $500 billion, indicating the high stakes surrounding these negotiations. As the August deadline approaches, the outcome remains uncertain, with potential repercussions for both nations’ economies.
Trade talks between Indian and American officials have been ongoing, oscillating between optimism and caution on both sides regarding an announcement. When pressed on the negotiations, Trump remarked: "We're going to see. India has been a good friend, but you just can't do that," in reference to India's tariff policies. The U.S. has already designated India as a "tariff king" and accused it of taking advantage of trade relations.
Despite the heightened tension, India has been defensive over its tariff rates, advocating for the protection of its agricultural sector, citing food security and the livelihoods of millions of small farmers as paramount concerns. In April, Trump announced tariffs of up to 27% on Indian goods, although this was subsequently put on hold as talks progressed.
U.S. Trade Representative Jamieson Greer emphasized the constructiveness of discussions with India, but noted that the Indian market has a long history of protectionist policies. One of the primary sticking points in negotiations has been agriculture and dairy access, where the U.S. has sought greater involvement in India's vast market, one that India is reluctant to open due to protective laws governing farmers’ welfare.
Indian Commerce Minister Piyush Goyal expressed optimism about potential developments, mentioning positive advancements in talks with the U.S. He affirmed India's commitment to safeguarding agricultural interests, reiterating that India has made strides in reducing tariffs on certain goods, yet the U.S. continues to experience a significant trade deficit.
With bilateral trade between the two countries having reached $190 billion in 2024, Trump and Modi have set ambitious targets of expanding this figure to $500 billion, indicating the high stakes surrounding these negotiations. As the August deadline approaches, the outcome remains uncertain, with potential repercussions for both nations’ economies.
