Donald Trump signals over 10% tariffs in India-US trade deal framework

On Tuesday, Trump said the bilateral trade pact with Indonesia would result in tariff- and non-tariff-barrier-free access for US goods to the Indonesian market

United States (US) President Donald Trump has said that a trade deal with India would be on the “same line” as that with Indonesia, which will face a 19 per cent tariff – thus suggesting that India, too, may have to brace for tariffs exceeding the 10 per cent threshold under the proposed interim agreement. 

“We have another deal coming up, maybe with India,” Trump told reporters at the White House on Wednesday. “We have some pretty good deals to announce.” 

Earlier on Tuesday, providing contours of the deal with Indonesia, Trump said the bilateral trade pact with Jakarta would result in tariff- and non-tariff-barrier-free access for American goods to the Indonesian market. In exchange, Indonesia will face a 19 per cent tariff on its exports to the US, down from the 32 per cent initially proposed last week. 

 

“We have a couple of those deals that are going to be announced. India basically is working along that same line (as Indonesia). We’re going to have access to India; and you have to understand, we had no access into any of these countries. Our people couldn't go in. Now we’re getting access because of what we’re doing with the tariffs,” Trump told reporters. 

Trade economist Biswajit Dhar said the 10 per cent base tariff is likely to remain, and India should prepare for higher duties. “I don’t think the 10 per cent tariff will go away. That’s the bottom line, with which Trump is negotiating,” he said. “We should get a deal which doesn’t include our sensitive sectors, such as agriculture and dairy. We need to protect our main cereals from the (US) push for exporting GM (genetically modified) crops.” 

Ajay Srivastava, founder of the Delhi-based think tank Global Trade Research Initiative (GTRI), warned against rushed negotiations and emphasised the importance of transparency. 

 

India must negotiate transparently, guard against one-sided outcomes, and not succumb to pressure for quick, symbolic agreements that compromise its long-term economic interests, Srivastava said. 

“India must insist on a jointly issued, written statement before acknowledging any agreement. Verbal assurances or informal understandings --especially those announced on social media -- are no substitute for formal, verified commitments,” he added. 

A team of officials from New Delhi is currently in Washington to negotiate an interim trade agreement ahead of the August 1 deadline. India has been pressing for an exemption from Washington’s proposed 26 per cent reciprocal tariff and the existing additional 10 per cent duty. 

In a post on Truth Social, Trump said that as part of the deal, Indonesia has committed to buying $15 billion in US energy, $4.5 billion in American agricultural products, and 50 Boeing jets, including several 777s. “For the first time ever, our ranchers, farmers, and fishermen will have complete and total market access to the Indonesian market of over 280 million people,” Trump wrote. “If there is any transhipment from a higher tariff country, then that tariff will be added on to the tariff that Indonesia is paying,” he added.