New York/Washington: US President Donald Trump is “frustrated” with the lack of progress on trade talks with India and feels that the 25 per cent tariff imposed on the country will “address and remedy” the situation, the White House economic adviser suggested on Wednesday.
“Well, India has had a market that’s been pretty much closed to American products, and we’ve been wide open to theirs. And I think President Trump is frustrated with the progress we’ve made with India, but feels that a 25 per cent tariff will address and remedy the situation in a way that’s good for the American people,” National Economic Council Director Kevin Hassett said in the White House.
In a post on social media, Trump said that the US has a massive trade deficit with India and also criticised India for buying a “vast majority” of its military equipment and energy from Russia, as he announced a 25 per cent tariff on India.
The decision comes after the failure to reach an interim trade deal, with Trump reportedly dissatisfied with the outcomes secured by his negotiators. “What’s going to happen is that India is going to cut their prices to the US in order to maintain their market share,” Hassett added.
“Then they might reconsider their practices, which have led to this higher rate. And over time, I would guess the Indian firms will be onshoring production in the US, and Indians might even open their markets more to us, so that we reconsider a future trade deal.”
Trump on Wednesday announced a 25 per cent tariff on all Indian imports, effective August 1, along with an unspecified penalty tied to India’s ongoing purchases of Russian oil and military hardware.
In a post on Truth Social, he wrote: “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country. Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! [sic] INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!”
According to a report by news agency PTI, the announcement came just a day after Indian officials said a US trade delegation was expected to visit New Delhi on August 25 to resume negotiations.
The move is widely seen as a pressure tactic aimed at pushing India to accept US demands, especially as Washington has recently secured favourable trade agreements with partners such as Japan, the UK, and the European Union.
In response, India’s Ministry of Commerce and Industry stated that it is assessing the impact of the US move, but emphasised that national interest remains paramount. “The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements, including the latest Comprehensive Economic and Trade Agreement with the UK,” the ministry stated.
India reiterated its commitment to working toward a “reciprocally advantageous trade agreement,” but with Trump escalating pressure tactics, the path forward remains uncertain.
