President Donald Trump has announced that trade talks with India have resumed days after he doubled tariffs on it from 25% to 50%, saying India could cut its duties on the United States “to nothing.”
In a social media post on Monday, Trump complained that the U.S. does “very little business with India,” arguing “they sell us massive amounts of goods, their biggest ‘client,’ but we sell them very little.” The U.S. had a $45.8 billion trade deficit with India last year, according to Census Bureau data.
“The reason is that India has charged us, until now, such high Tariffs, the most of any country, that our businesses are unable to sell into India,” he wrote. “It has been a totally one sided disaster! Also, India buys most of its oil and military products from Russia, very little from the U.S. They have now offered to cut their Tariffs to nothing, but it’s getting late. They should have done so years ago. Just some simple facts for people to ponder!!!”
Trump last week added a 25% tariff on India for its continued purchase of Russian oil, despite the Russia–Ukraine war, raising duties on it to a similar level as its levies on other BRICS countries, including China and Brazil.
Five previous rounds of trade negotiations between the U.S. and India have not concluded in a deal for U.S. tariffs to be lowered to about 15%, as with agreements reached between the U.S. and Japan, South Korea, and the European Union. Disagreement has arisen regarding agriculture and dairy as Trump tries to gain greater market access while Indian Prime Minister Narendra Modi attempts to protect farmers. Farmers are an important voting bloc for both Trump and Modi.
Last week, Modi announced tax relief to help counter the effect of the tariffs on Indian consumers and producers, as the value of the Indian rupee decreased in response to the increased U.S. duties and economic growth is poised to slow down. The industries that will be most affected include textiles, gems and jewelry, footwear, leather goods, sporting products, and chemicals and machinery.
Modi was in China this weekend, his first trip there in seven years, to meet with Chinese President Xi Jinping and Russian President Vladimir Putin on the sidelines of a Shanghai Cooperation Organization summit in Tianjin. Critics have raised concerns that Trump’s tariffs could improve India’s relationship with China at the expense of the U.S. China and India have had strained relations in the past over a border dispute.
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Aside from Trump’s tariffs, the U.S. and India have experienced other pressures on the bilateral relationship, including the president’s criticism of Apple for manufacturing its iPhones in India and not the U.S., and India undermining Trump’s claims he brokered peace between India and Pakistan.
Trump was expected to make his own trip to India this year for the Quad Leaders Summit but may no longer do so because of tensions.