US-India Trade Talks Hit Snag Amid Tariff dispute
Negotiations for a phase-one trade deal between the United States and India have encountered a meaningful hurdle, with reports indicating that the US has imposed tariffs on Indian steel and aluminum products. This move comes despite previous commitments from both President Trump and Indian Prime Minister Narendra Modi to finalize an initial trade agreement and expand bilateral trade to $500 billion by 2030.
The US decision to levy tariffs on Indian metals,which are reportedly on par with those imposed on steel and aluminum from other nations,has cast a shadow over the ongoing trade discussions. While copper is a notable export for Australia,its sales to the US last year amounted to only $US36 million,representing less than 1% of Australia’s total copper exports. Chile remains the primary supplier of copper to the US.
This setback follows earlier assurances from both leaders to conclude the first phase of a trade deal by the autumn and to significantly boost bilateral trade. Indian officials have consistently highlighted the importance of the US as a strategic partner,notably in balancing China’s influence. However, they have also stressed the need to maintain versatility in areas such as agriculture, data governance, and state subsidies.
It remains unclear whether the US tariff declaration is a strategic negotiating tactic. Similar to the situation with Japan, where President Trump expressed pessimism about a deal on June 30, a subsequent agreement was reached on July 22.
An Indian goverment official confirmed to Reuters that New Delhi is continuing its engagement with the United States to finalize an agreement. Economists also expressed optimism, with Madhavi Arora of Emkay Global stating, “While the negotiations seem to have broken down, we don’t think the trade-deal haggling between the two nations is over yet.”
The US and the European Union recently reached a trade agreement, which imposes a flat 15% tariff on European imports to the US, impacting a third of global trade.