Trump threatens 25% tariffs on India as trade talks stall
What's the story
United States President Donald Trump has warned of imposing import duties of up to 25% on India as the August 1 deadline for a trade agreement approaches. Speaking to reporters, Trump said that discussions are still ongoing and the deal with India is not yet finalized. "(They will pay) 25%," said the US president, adding that India has imposed higher tariffs than most countries.
Trump
'India a good friend but...'
"India has been a good friend, but India has charged basically more tariffs than almost any other country," Trump said aboard Air Force One as he returned to Washington from Scotland. "You just can't do that." He also reiterated the claims that he helped broker the ceasefire between India and Pakistan after the Pahalgam terror attack, saying, " They ended the war with Pakistan at my request."
Negotiation progress
India preparing for possible US tariffs
According to Reuters, India is preparing for possible US tariffs on select exports, which could be between 20% and 25%. However, instead of making new concessions hastily, India plans to resume trade talks when a US delegation visits in mid-August. An Indian official said that "talks are progressing well" and a deal will soon be worked out. The goal is to finalize a comprehensive bilateral trade agreement by September or October.
Trade tensions
Agriculture and dairy sectors remain contentious
Despite positive discussions, some sectors remain contentious. India is firm on its decision not to allow importing genetically modified crops like soybean and corn and is also unwilling to open its dairy market. The US is pressuring India to approve imports of genetically modified crops like soybean meal and distillers dried grains with solubles (DDGS) for animal feed. Initially, India did not reject the idea but after experiencing domestic resistance, India appears to have toughened its stance on GM imports.
Tariff expansion
Trump's wider tariff strategy
On Monday, Trump hinted had hinted at the wider tariff strategy, saying most countries without bilateral trade deals could soon face US tariffs of 15%-20%. This would be higher than the 10% baseline tariff introduced in April. The administration plans to notify around 200 nations of the new "world tariff" soon.