US India Trade Talks Intensify as Trump Considers Tariff Escalation Amid Complex Negotiations and Potential August Deadline
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US India Trade Talks Intensify as Trump Considers Tariff Escalation Amid Complex Negotiations and Potential August Deadline
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The big headline this week: President Donald Trump has unveiled a new wave of tariffs aimed at 14 countries, including several key US trading partners in Asia, Africa, and Eastern Europe. Notably, India is not on the list of countries facing immediate new tariffs, but that’s because Washington and New Delhi are still locked in high-stakes trade negotiations. Trump told reporters yesterday, as covered by Economic Times and Business Standard, that the two sides are “very close” to announcing a deal, even as a new deadline looms for August 1st.
The backdrop: In April, Trump imposed a sweeping 26% tariff on Indian goods, but that was later rolled back to a 10% basic duty with a temporary reprieve. This lower rate will hold until negotiations conclude, while the threat of an increase to a much higher reciprocal tariff—reported by the Trade Compliance Resource Hub as 27% or even potentially 25% across all products—remains if talks break down. For context, other nations such as Thailand and Cambodia now face tariffs as high as 36%, while some, like Laos and Myanmar, are staring down duties of 40%. Meanwhile, tariff uncertainty has already rattled global markets and injected more pressure into supply chains and US consumer prices, according to India Today and GTRI analysis.
Negotiations are tense. India’s Commerce Minister Piyush Goyal has insisted there will be no agreement under external pressure or deadlines, emphasizing that any deal must be “mutually beneficial” and in India’s best interest, as reported by the Economic Times. New Delhi is seeking lower duties for its labor-intensive exports—think textiles and leather goods—while the US wants broader access for American farm products, especially genetically modified crops and cattle feed, issues that remain politically sensitive in India.
While the UK and Vietnam have managed to secure exemptions or lower tariff rates, India’s deal is still in progress. Trump has warned that any country responding with retaliatory tariffs will see the US match those increases dollar for dollar, raising the stakes for India’s negotiators.
Industry watchers tell listeners to expect an announcement soon, with sources citing a possible wrap-up within days. But experts warn that Trump’s hardline “Yielding to American Tariff Retaliation Agreement” model—what some call YATRA—means India must carefully weigh long-term impacts before signing.
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