Trump Softens Stance on Tariffs, India Ready to Negotiate on Market Access
In a surprise move, US President Donald Trump hinted at a potential softening of his stance on reciprocal tariffs, stating that “a lot of countries” would be given a break on April 2. This unexpected development has caused a stir in the global market, with a sense of optimism prevailing. However, many remain uncertain about the long-term implications of Trump’s comments, given his recent statements suggesting he may impose tariffs on automobiles before the start of the reciprocal tariffs period.
India, in particular, is bracing for US demands for increased market access in key sectors such as automobiles, whisky, and some agricultural products. Formal talks between the two nations, initially set to begin on Tuesday, have been postponed to Wednesday, allowing the Indian Ministry of Commerce to finalize their negotiating stance. The “terms of reference” (ToR), a document outlining the scope and objectives of the negotiations, is currently being drafted, with input from all relevant ministries.
Sources within the Indian Ministry of Commerce have indicated that market access and digital trade will be the primary focus of the first tranche of the bilateral investment agreement. The US has significant demands in these areas, particularly in the automobile, whisky, and agriculture sectors, including genetically modified products. Other key areas, such as labor, environment, and government procurement, are also expected to be discussed.
India, on the other hand, is likely to push for concessions on reciprocal tariffs, as well as the removal of certain labelling-related non-tariff barriers and demands in the services sector, including more visas for working professionals in the US. The country has also expressed concerns over the US’ push for greater access to data, which could challenge India’s strict data localisation norms. India had earlier responded to similar concerns by mandating that payment system providers like Mastercard and Visa store payment data within the country’s borders.
Furthermore, India has hinted at a willingness to cut tariffs on more than half of US imports worth $23 billion in the first phase of the trade deal, which is aimed at avoiding reciprocal tariffs. This development has raised hopes that a less disruptive US tariff regime might be on the horizon.
In a related development, the Reuters news agency reported that Trump is considering a two-step approach to implementing his new tariff regime, potentially invoking rarely used emergency powers to impose immediate duties on imports while formal investigations into trading partners take place. This plan would allow the administration to impose duties of up to 50 per cent on certain imports.
As the world waits with bated breath for the outcome of these negotiations, one thing is certain: the fate of global trade hangs in the balance. Will Trump’s hint at a softening of stance lead to a more favorable outcome for nations like India, or will the uncertainty surrounding the White House’s trade policy continue to shake the markets? Only time will tell.
Original Source: https://indianexpress.com/article/business/donald-trump-signals-softening-stance-on-reciprocal-tariffs-talks-in-delhi-today-9906231/
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Publish Date: 2025-03-26 04:00:00
