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Tariffs and Trade - Trump’s Pressure on India
India currently enjoys a $46 billion trade surplus with the U.S., a key issue that President Trump and Prime Minister Modi will discuss over the next two days (February 12/13th). Trump is staunchly opposed to trade deficits and is prepared to impose tariffs on Indian goods unless the imbalance is addressed.
Modi has already taken steps to mitigate tensions by lowering tariffs on certain American imports, including motorcycles. Additionally, India has a shopping list of defence and military equipment it plans to purchase from the U.S., which may appease Trump to some extent. However, these measures alone won’t fully resolve his primary goal of eliminating the trade deficit. Increased Indian imports of American oil and gas, coal, gems will likely be another topic of discussion.
At the same time, India must also contend with its own trade deficit, largely driven by crude oil imports. If pricing is favourable, India could increase its purchases of American oil and gas, helping balance trade on both sides.
Ultimately, the hope is that the two leaders can strike a mutually beneficial trade arrangement and avert new tariffs. One potential goodwill gesture is India’s willingness to repatriate illegal immigrants of which 104 have already arrived back, with more to follow. With both sides making concessions, a positive outcome remains possible.
India currently enjoys a $46 billion trade surplus with the U.S., a key issue that President Trump and Prime Minister Modi will discuss over the next two days (February 12/13th). Trump is staunchly opposed to trade deficits and is prepared to impose tariffs on Indian goods unless the imbalance is addressed.
Modi has already taken steps to mitigate tensions by lowering tariffs on certain American imports, including motorcycles. Additionally, India has a shopping list of defence and military equipment it plans to purchase from the U.S., which may appease Trump to some extent. However, these measures alone won’t fully resolve his primary goal of eliminating the trade deficit. Increased Indian imports of American oil and gas, coal, gems will likely be another topic of discussion.
At the same time, India must also contend with its own trade deficit, largely driven by crude oil imports. If pricing is favourable, India could increase its purchases of American oil and gas, helping balance trade on both sides.
Ultimately, the hope is that the two leaders can strike a mutually beneficial trade arrangement and avert new tariffs. One potential goodwill gesture is India’s willingness to repatriate illegal immigrants of which 104 have already arrived back, with more to follow. With both sides making concessions, a positive outcome remains possible.
