Indian Goods to Face 25% Tariff Plus Penalty; Deal With Pakistan Reached
President Donald Trump said July 30 that Indian goods will face a 25% tariff, plus an unspecified penalty, for buying Russian energy and military equipment "at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE... ."
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He complained, "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."
Two minutes later, he wrote, "WE HAVE A MASSIVE TRADE DEFICIT WITH INDIA!!!"
Later in the afternoon, Trump posted that the U.S. and Pakistan had reached a deal, but did not say what the tariff rate would be.
On Liberation Day, the administration had planned to levy 27% tariffs on Indian goods, and 30% on Pakistani goods.
Medicines and pharmaceutical ingredients, cell phones, diamonds, cotton apparel and home goods, and jewelry are among India's top exports to the U.S.
The Indian government responded, "India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective." India added it "attaches the utmost importance to protecting and promoting the welfare of our farmers," micro, small and medium-sized businesses, and entrepreneurs.
Many of the tariffs and non-tariff barriers the U.S. complains about protect farmers.
Farwa Aamer, the Asia Society Policy Institute's director of South Asia initiatives, released a statement after Trump's social media posting that said, in part, "These negotiations were always going to be complex, and even with an early start to the talks, the timeline was too tight given India's sectoral concerns and strong reservations on opening access to its dairy and agriculture markets.
"There was strong optimism around the robust five rounds of talks, but clearly there was not enough to satisfy Washington's expectations."
"The 25% rate is much higher than that of Japan, Vietnam, and Indonesia, which means India loses some of its competitive advantage," she wrote.
She said India may lose confidence in its relationship with the U.S., given Trump's hostility to BRICS, his push for India to stop buying Russian oil, and the fact he keeps saying that trade ultimatums caused the India-Pakistan ceasefire. India says that's not so.
Pakistani Foreign Minister Ishaq Dar, at the Atlantic Council on July 25, said, "as long as we are better than or equal to our peers, we should be fine."