• Source:JND

United States President Donald Trump has expressed confidence that Washington and New Delhi will soon reach a trade agreement, while describing Prime Minister Narendra Modi as a "good friend."

Trump's remarks came days after his administration announced plans to impose an additional 12.5 per cent tariff on goods from India and 53 other economies, alleging they had failed to effectively prohibit the import of goods produced through forced labour.

Speaking to reporters at the White House, Trump discussed trade ties between the two countries and expressed optimism about ongoing negotiations.

"For years, India took advantage of the United States... They charged us tremendous tariffs and paid nothing... Now it is the exact reverse and we are making a lot of money with India. But we will get to a deal because I like your Prime Minister (Narendra Modi) a lot; he is a good friend of mine, and we get along well. We have a good relationship."

On Tuesday, the United States announced a fresh round of tariffs, including a 10 per cent baseline duty and an additional 12.5 per cent tariff on several major economies. Washington claimed investigations had found that goods imported from 60 countries were being produced using forced labour.

Trump's Tariff Threat to India

A US delegation was in India earlier this week to negotiate an interim bilateral trade agreement. According to India's Commerce Ministry, the discussions were held in a spirit of cooperation and pragmatism, with both sides reaffirming their commitment to concluding a mutually beneficial agreement that would strengthen bilateral trade and economic ties.

However, the United States also unveiled an additional 12.5 per cent tariff on imports from 54 economies, alleging that these countries had failed to effectively prohibit the import of goods produced through forced labour.

The Office of the United States Trade Representative (USTR) listed 54 economies, including India, that it said had not adequately enforced restrictions on goods made with forced labour. The list includes Australia, China, India, Israel, Japan, Qatar, and Russia, among others. Other countries named were Saudi Arabia, Singapore, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Türkiye, the United Arab Emirates, and the United Kingdom.

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The proposed action also includes a textile mechanism that would allow a specified volume of apparel and textile imports from certain economies to enter the United States at a reduced Section 301 tariff rate.

All You Need to Know About the India-US Trade Deal

India and the United States initiated a trade framework on February 7 following a phone call between Trump and Modi. After the conversation, both countries issued a joint statement outlining the framework for the first phase of the Bilateral Trade Agreement (BTA), also referred to as an interim trade deal.

Under the proposed agreement, the United States had agreed to reduce tariffs on Indian exports to 18 per cent from 50 per cent. Washington also removed the 25 per cent tariffs imposed on Indian goods over India's purchase of Russian oil and planned to reduce the remaining duties to 18 per cent under the pact.

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However, on February 20, the US Supreme Court ruled against Trump's sweeping reciprocal tariffs, which had been imposed under the International Emergency Economic Powers Act (IEEPA) of 1977.

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Following the ruling, Trump announced a 10 per cent tariff on imports from all countries for a period of 150 days beginning February 24. Since then, India and the United States have been renegotiating the trade agreement in light of the Supreme Court's decision and subsequent policy developments.


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