WASHINGTON – President Donald Trump said that India may be hit with a tariff rate of 20 per cent to 25 per cent but cautioned the final levy had still not been finalised as the two countries negotiate on a trade deal
ahead of an Aug 1 deadline.
“I think so,” he told reporters on July 29 when asked if that was a possible tariff rate for New Delhi. His comments came before the start of the business day in India and there has been no official response yet from Prime Minister Narendra Modi’s government.
“India has been a good friend, but India has charged basically more tariffs than almost any other country,” Mr Trump said aboard Air Force One as he returned to Washington from a five-day visit to Scotland. “You just can’t do that.”
The president was commenting ahead of an Aug 1 deadline when a slew of so-called reciprocal tariffs are set to take effect on dozens of trading partners. Mr Trump announced higher levies in April, before pausing those tariffs at a reduced 10 per cent rate to allow time for negotiations.
Despite an extended deadline, Mr Trump has only secured a handful of deals.
India has conveyed to the Trump administration the red lines it won’t breach in finalising an agreement, officials familiar with the matter said in July. New Delhi won’t allow the US to export genetically modified crops to the country, and is unwilling to open widely its dairy and automobile sectors, the people said, asking not to be identified because the discussions are private.
India has expressed willingness to offer zero tariffs
on some goods such as auto components and pharmaceuticals.
Mr Modi’s government has taken a more cautious stance as it faces pressure to protect India’s politically sensitive farm sector. Millions depend on agriculture for their livelihoods and farmers form a key voting bloc for Mr Modi’s party, which faces a crucial state election in the coming months.
US Trade Representative Jamieson Greer said July 28 that the US needed more time for talks with India to gauge the country’s willingness to open its market more to American exports.
Reuters reported earlier on July 29 that New Delhi is bracing for higher tariffs likely between 20 per cent and 25 per cent.
India and the US have already signed terms of reference for a bilateral trade deal and have been negotiating an interim agreement that New Delhi hoped would give it a reprieve from higher US import duties.
Mr Trump has separately threatened to place “secondary tariffs” on Russia, a move that would likely hit countries like India and China that buy its oil. Bloomberg
