US, India in Talks on Trade Deal that May Cut Tariff Below 20 Percent
To provide the South Asian country an advantage over its neighbors in the region, the US is attempting to reach an interim trade agreement with India that might lower the country's projected tariffs to less than 20 percent.
To give New Delhi time to settle any lingering difficulties before a more comprehensive accord is anticipated this fall, the interim arrangement would permit further negotiations.
According to reports, the statement would probably establish a baseline tariff of less than 20 percent, as opposed to the 26 percent that was first suggested.
It would also contain wording that would permit the two parties to continue discussing the rate as part of the final agreement. It's uncertain when an interim deal will be reached.
India would join a select group of trading partners who have negotiated agreements with the Trump administration if they are ratified.
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Ahead of an August 1 deadline, US President Donald Trump has also surprised dozens of trading partners this week by declaring tariff rates as high as 50 percent in certain instances.
Trump claimed to have inked a deal with Vietnam that included 20% import taxes; New Delhi is looking to negotiate a better deal. But that rate took Vietnam off guard, and they are still working to bring it down. The only other nation with which Trump has announced a trade agreement is the United Kingdom.
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Additionally, Trump stated that he is considering imposing 15 percent to 20 percent blanket tariffs on the majority of trading partners who have not yet been notified of their rates. For almost all US trading partners, the current worldwide baseline minimum charge is 10 percent.
As of now, tariff rates for Asian countries have ranged from 20 percent for the Philippines and Vietnam to 40 percent for Laos and Myanmar.
Although India was one of the first countries to visit the White House for trade negotiations this year, tensions have surfaced in the last few weeks. Trump has warned more tariffs over India's membership in the BRICS organization, while saying earlier this week that an accord with the country is near. To move the negotiations along, a group of Indian negotiators is scheduled to travel to Washington shortly.
India has already presented the Trump administration with its best offer, outlining the boundaries of what it would and won't do in order to reach a deal.
A few major issues have caused both sides to back down, such as Washington's insistence that India allow genetically modified products on its market, which New Delhi has refused, citing concerns for its farmers.