Trump’s gold barb rattles India – US trade deal hopes to launch as new tariff wave
U.S. President Donald Trump’s keen rhetoric against the BRICS has sparked new uncertainty about the long-delayed India-U.S. trade agreement, months after the expected conclusion.
Republican leaders threatened fresh tariffs from countries that were “aligned with the BRICS anti-U.S. policies” on Tuesday, suggesting that the action challenged the dollar’s dominance.
While leaders from India and the United States have been assured that the bilateral trade ties remain strong and that a deal is expected to be reached in the fall, Trump’s latest warning followed by a harsh 50% tariff on Brazil, casting a long shadow on those plans.
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Ironically
Ironically, the warning comes the day after Trump claimed he was about to complete a trade deal that would exempt India from reciprocity tariffs currently with 26%.
On Wednesday, Trump followed up on a new round of taxes targeting 14 countries. Brazil has been hit hardest, with multiple products including copper facing punitive tariffs of 50%. Other countries on the list include Algeria, Libya, Iraq and Sri Lanka (30% tariff), Brunei and Moldova (25%), the Philippines (20%), and other countries in Asia, Africa and Eastern Europe.
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India remains cautious, eyeing potential trade advantage
Especially so far, India has exempted these measures from the brunt of the brunt. According to a report by Arihant Capital, ANI reported that this could make it a destination for foreign investment and diversification of supply chains, which could be beneficial to India.
“India may benefit from relatively low tariffs compared to many Apac countries,” the report said. He added that ongoing bilateral agreements and trade negotiations, including the recently signed UK-India Free Trade Agreement and ongoing EU negotiations, could enhance the manufacturing ecosystem in India.
Despite this, Prime Minister Modi’s government is still engaging in caution. Eariler, senior diplomat P Kumaran, confirmed at a press conference that Prime Minister Modi and Brazilian President Lula da Silva had “no discussion” during the former’s visit to Rio de Janeiro to the BRICS summit.
Indian industry prepares any results
Industry leaders also appear cautious, but ready. “No compulsiveness,” Rajiv Memani, president of the Federation of Industry of India (CII), responded to trade tensions. “India can only reach this deal if India and the United States have interests.” He stressed that extensive consultations have been conducted in various departments to ensure that national interests are not compromised.
However, Trump’s tariff rhetoric and implementation of the August 1 deadline continues to maintain New Delhi’s advantage, especially with a wider impact on global supply chains and India’s geographical strategic balance between Washington and the BRICS allies.
