Trump rules out trade talks with India until tariff issue resolved

After imposing a staggering 50% duty on Indian goods, US President Donald Trump has also ruled out any trade talks between the two countries until the tariff issue is resolved.
“No, not until we get it resolved,” Trump said in the Oval Office on Thursday in response to a question on whether he expects more trade negotiations with India after doubling the tariffs on Indian imports to 50%. A prominent American Congressman Representative Gregory Meeks, a Democrat, meanwhile, said Trump’s latest ‘tariff tantrum’ risks years of careful work to build a stronger US-India partnership.
Over the last few months, India and the US have held several rounds of negotiations for a bilateral trade deal, but it could not be sealed in view of sharp divergences in certain critical areas, including agriculture and dairy. The next round of bilateral talks for an initial trade agreement was scheduled to be held in August 25 in New Delhi, two days before the 25% penalty on India, which is on top of a 25% tariff, for continued purchase of Russian oil kicks in.
As India explored various options to deal with Trump’s action, Commerce and Industry Minister Piyush Goyal said the world today recognises the strengths of India and its demographic advantages. “1.4 billion people bring aggregate demand, huge domestic market …why else do you think everybody is vying up to do trade or have a better market access,” he told the Business Today India@100 event in Delhi on Friday.
Speaking at the same event, former G20 Sherpa Amitabh Kant said India should never lose its strategic autonomy and never yield to pressure while negotiating trade deals with the US, suggesting at the same time that the country should look at a long term perspective and behave in a calm and collected manner.
India should use trade-related uncertainties as a unique opportunity to carry out very vigorous reforms in our economy, he said.
“We still have 20 days for these (US) tariffs to kick in.We should never yield to pressure, but we should negotiate in a very rational manner, in a sensible manner, and I think there is plenty of time to be able to arrive at an agreement.”
Moody’s Ratings said India’s GDP growth is likely to slow down by about 30 basis points to 6% in the current fiscal if the US implements the total 50% tariffs from August 27.
However, resilient domestic demand and the strength of the services sector will mitigate the strain on India, Moody’s said, adding that India’s response to high US tariffs will ultimately determine the effect on its growth, inflation and external position.