Donald Trump has said America is going to have a “very big” trade deal with India, his arrestion coming hours after a news report quoting sources in the Indian side said that the trade talks with the US had hit a roadblock over disagreements on import duties for auto components, steel and farm goods.
"Everybody wants to make a deal and have a part of it,” Trump said during an event at the White House promoting passage of the GOP's tax and spending cuts legislation on Thursday.
“Remember a few months ago, the press was saying, 'You really have anybody of any interest?’ Well, we just signed with China yesterday. We are having some great deals. We have one coming up, maybe with India. Very big one," said Trump.
His remarks come as an Indian team headed by chief negotiator Rajesh Agarwal on Thursday arrived in Washington for the next round of the trade talks. Agrawal is the special secretary in the department of commerce.
India and the US are engaged in negotiations for an interim trade deal and are trying to finalise a pact before July 9. The high tariffs announced by the US on April 2 were suspended by the Trump administration till July 9.
Agriculture and dairy sectors are difficult and challenging areas for India to give duty concessions to the US. India has not opened up dairy in any of its free trade pacts signed so far.
June 26 deadlock after brief optimism
The June 26 deadlock came as a shocker as the air around the trade deal was fairly optimistic, with Trump saying that India had proposed a "no tariffs" agreement for American goods, with officials from both countries suggesting India could be among the first countries to strike a deal on the new July 9 US tariffs.
Although Trump's statement doesn't underline the finer details of the trade deal, India has been reportedly pushing for a rollback of the proposed 26 per cent reciprocal tariff, along with concessions on existing US tariffs on steel and auto parts.
US negotiators have not yet agreed to the demands, three Indian government officials told Reuters in the report that came hours before Trump’s announcement.
"The US side first wants India to commit to deeper import tariff cuts on farm goods like soybeans and corn, cars and alcoholic beverages along with easing of non-tariff barriers," a source in the Indian side told Reuters. “This has been a major factor of concern for both the sides.”
As the talks concluded on June 10, commerce minister Piyush Goyal said that India and the US were in the process of negotiating a fair and equitable trade agreement that will benefit both economies.
Reality checks
On June 26, Trump announced a truce with China in the ongoing tariff war, saying an agreement was signed which involved Beijing supplying rare earths and magnets and the US lifting some controls.
But there hasn't been any signed agreement or a response from Beijing.
A month ago, Trump said India had offered a "zero tariffs" trade deal, but India's external affairs ministry had said the negotiations were far from final, with no government statement confirming such a development.
A "first trade deal" with the UK was also announced by Trump, which largely aimed to open markets to US beef, ethanol, and British autos and steel, but a detailed timetable or quantifiable terms and conditions were missing.
