US President Donald Trump is set to release his highly anticipated tariff letters on Monday. Trump’s announcement, which comes after a fresh warning to BRICS countries, will reveal whether a trade deal has been struck or his Liberation Day tariffs have been imposed.
As the July 9 deadline nears, India and the US have been locked in detailed negotiations for a bilateral trade agreement. These talks began after the US president hiked the tariff on India to 26 per cent from the previous 10 percent.
Also Read: Donald Trump to send first tariff letters at this time on Monday
After ‘Liberation Day’, Trump declared a 90-day pause on the tariffs announced for all countries. The US president, however, has stated he will extend this deadline to August 1, after which the levies on countries will be imposed.
However, with issues around automobiles and agriculture sectors unresolved, Trump’s warning of additional 10 per cent tariffs on countries backing BRICS’ ‘anti-American policies’ could change the outcome for India.
Trade deal hangs in balance
India and the US were locked in weeks-long negotiations in Washington as part of an attempt to lock a trade deal before Trump’s revised tariffs kick in. India’s negotiating team, led by chief negotiator Rajesh Agrawal, returned to Delhi last week after week-long talks with the Trump administration.
{{/usCountry}}India and the US were locked in weeks-long negotiations in Washington as part of an attempt to lock a trade deal before Trump’s revised tariffs kick in. India’s negotiating team, led by chief negotiator Rajesh Agrawal, returned to Delhi last week after week-long talks with the Trump administration.
{{/usCountry}}The deal between New Delhi and Washington is set to be finalised ahead of the July 9 deadline, after which the 26 per cent tariff on India (16 per cent impending and 10 per cent existing) will kick in.
However, the Centre has stated that it will prioritise “national interest” when it comes to the deal with the US as opposed to meeting a deadline.
As per reports, India and the US are expected to strike a “mini” trade deal, which would then pave the way for broader discussions between the two partners.
While an official number is yet to be shared, officials have stated that India can expect its tariff to stay at 10 percent.
Ahead of the deadline, Trump shared that India and the US “are going to have a deal." Speaking to reporters aboard Air Force One, the US president hinted at a “different kind of deal” with India.
“It is going to be a deal where we are able to go in and compete. Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much less tariffs," he told reporters.
Will India face more tariffs?
Despite the close ties between India and the US and Trump and Prime Minister Narendra Modi, an uncertainty looms as to what the US president's next decision will be.
Trump's latest warning against BRICS comes after the 10 member states met in Brazil and condemned the American and Israeli strikes on Iran. Furthermore, PM Modi, who was one of the key figures at the BRICS Summit in Rio, highlighted the double standards imposed on the Global South.
While Modi did not directly name the US or any other nation, his remarks come as an apparent dig at Western nations. Furthermore, BRICS members also condemned the use of “increase in tariffs” as an intimidation method.
If India fails to strike a deal, the 26 per cent tariffs on goods comes into effect. However, if Trump decided to add his extra 10 per cent, the tariff rate for New Delhi may rise to 36 per cent.