The United States and India would soon reach a trade agreement, US President Donald Trump said on Thursday, while claiming that New Delhi had for years “taken advantage” of Washington but the relationship had been reversed.
“[India] charged us tremendous tariffs and paid nothing,” Trump told reporters at the White House. “...Now it is the exact reverse and we are making a lot of money with India.”
He added: “But we will get to a deal because I like your prime minister a lot…he is a good friend of mine…we have a very good relationship.”
After an interim bilateral trade deal was agreed on February 2, US tariffs on India goods would have been reduced to 18% from a combined rate of 50%. The earlier rate of 50% had included a punitive levy of 25% imposed in August over India’s purchase of Russian oil.
However, negotiations on the final deal were postponed after the US Supreme Court on February 20 struck down Trump’s global tariffs, ruling that he had exceeded his authority.
The judges said that the 1977 International Emergency Economic Powers Act that Trump had invoked “does not authorise the president to impose tariffs”.
Hours after the court struck down his levies, Trump imposed a temporary 10% tariff on goods imported into the US, citing his authority under the 1974 Trade Act. The new tariff rate is for a maximum of 150 days, unless the US Congress approves an extension.
On February 21, the US president said that he was increasing the tariffs to the “fully allowed, and legally tested” level of 15% from 10% with immediate effect. However, it is unclear as to when the increased tariff rate would take effect.
This has left the status of US’ trade deals with countries, including India, unclear.
On Thursday, a US delegation concluded four-day negotiations on an interim bilateral agreement.
India’s Ministry of Commerce and Industry said that the “engagements were marked by a spirit of cooperation and pragmatism, with both sides reaffirming their commitment to concluding a mutually beneficial agreement that strengthens bilateral trade and economic ties”.
Trump’s remark also came two days after the US Trade Representative proposed an additional tariff of 12.5% on India, citing alleged failure by New Delhi to effectively prohibit the trade of goods produced with forced labour.
Written by Tanya Shrivastava. Edited by Nachiket Deuskar.
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