WASHINGTON D.C./NEW DELHI — Just days before a self-imposed August 1 deadline for additional tariffs, US President Donald Trump warned on Tuesday that he would put a 20 to 25 percent duty on Indian imports. At the same time, he said that the India-US trade accord was “working out very well.” During a news conference on Air Force One, he controversially repeated his claim that he had helped India and Pakistan reach a ceasefire after recent hostilities.
In response to a report that said India was ready for such duties, President Trump said that India has historically charged the US more tariffs than other countries. He made it clear that this would stop now that he is “in charge.”
India has been a terrific friend. But India has levied greater tariffs than most other countries over the years. But I’m in charge now. And you just can’t do that. I believe that the trade agreements are going quite nicely. The US President remarked, “I hope they’re good for everyone, but they’re very, very good for the US.” Trump has not yet sent any official letters to India outlining particular tariffs, even though he has done so for other countries.
This comes after Trump put a 26 percent tax on Indian imports on April 22, but that was put on hold. The deadline for these “reciprocal” taxes to possibly go into force is August 1. Howard Lutnick, the US Secretary of Commerce, recently said that the August 1 deadline for reciprocal tariffs would not be pushed back. New tariffs will start to affect countries on that day.
Indian authorities, on the other hand, are still hopeful about the trade talks that are going on. Piyush Goyal, India’s Union Minister for Commerce, said on Sunday that the trade talks between India and the US were going “very well.” “India is negotiating from a strong, confident position right now. This very confidence is what keeps us making successful free trade deals… Goyal said, “Our talks with the United States are going very well.” He said that a US delegation is set to go to India in August for the next round of talks, and that both parties hope to finish the first part of a bilateral trade agreement (BTA) by the fall (September to October).
Vikram Misri, India’s Foreign Secretary, acknowledged last week during Prime Minister Modi’s visit to the UK that India has been in talks with the US on a possible Bilateral Trade Agreement (BTA). “We’re talking about that in a different vertical. I can only say that our engagement is going on. Misri said, “The contacts are underway, and we’ll see how that goes,” stressing that the contacts with US partners are still going on. On July 14, a high-ranking government official confirmed again that India was making real progress toward a mutually beneficial BTA and was following the route set by the presidents of both countries. India reportedly seeks improved access to US markets for its labor-intensive industries and reduced tariffs on steel, aluminum, and auto parts. It is also against US demands for duty cuts on dairy and agricultural products.
President Trump also seized the opportunity to claim credit for facilitating a ceasefire agreement between India and Pakistan following the previous conflict in May. The April 22 Pahalgam terror assaults, which murdered 26 people, started the conflict. India’s response, “Operation Sindoor,” involved precise strikes on militant camps in Pakistan and Pakistan-occupied Jammu and Kashmir (PoJK).
“Hey, India, they’re my friends, and he’s (PM Modi) my friend. You know they ended the war with Pakistan, and I was great, and Pakistan did too.” Trump said, “We made many good deals.” India, on the other hand, has always denied this claim. On Monday, External Affairs Minister S. Jaishankar told Parliament that there was “no call” between Prime Minister Modi and President Trump between April 22 and June 17. He also said that there was no link between trade and the ongoing crisis. He made it clear that Pakistan’s Director General of Military Operations (DGMO) had called their Indian counterpart to ask for an end to hostilities. After that, the two military agreed to a ceasefire directly. On Tuesday, Prime Minister Modi said, “No world leader asked for the suspension of Operation Sindoor,” which directly contradicts Trump’s claims of mediation.
As the August 1 deadline gets closer, everyone is still watching how the trade relationship between the two strategic partners is changing and how new tariffs might affect their strong economic ties. In the April-June quarter of this fiscal year, India’s exports to the US rose by 22.8% and its imports from the US rose by 11.68%.