US reciprocal tariffs: India, others, eye an extended Aug 1 deadline for wrapping up trade deal

Indian Express

6 hours ago

As the conclusion of the interim trade deal with India before July 9 remains uncertain, the United States has indicated that it may allow negotiations to continue until an extended deadline of August 1. Indian officials have indicated that while efforts are still underway to wrap up the trade negotiations, which had reached the last leg till the challenges thrown up in the final lap delayed the announcement of a pact, there could now be some more elbow room with respect to the fresh timelines.
US Treasury Secretary Scott Bessent, in an interview with CNN, said: 'We're going to be very busy over the next 72 hours. President Trump is going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1, you will boomerang back to your April 2 tariff level.'
'So I think we're going to see a lot of deals very quickly. And we're going to send out probably 100 letters to small countries where we don't have very much trade, and most of those are already at the baseline, 10 per cent,' Bessent said.
This is significant for India, as it is unlikely to sign on the dotted line by then, even though desperate efforts are under way to ink a mini trade deal covering goods, excluding contentious items. This comes as Indian negotiators, led by Chief Negotiator and Special Secretary Rajesh Aggarwal, returned on Friday after nearly a week of talks with the US. A government official indicated that the likely interim deal will involve only goods, as services and labour issues are not currently part of the negotiations.
The US maintains that the August 1 cut-off date is not a new deadline but an outer limit for countries to 'speed things up', and that this strategy has helped bring trading partners such as the European Union on board.
When Bessent was asked if there is a playbook for these actions, he said: 'The playbook is to apply maximum pressure. You know, we saw that the EU was very slow in coming to the table. Three weeks ago, on a Friday morning, President Trump threatened 50 per cent tariffs. And within a few hours, five of the European national leaders had called him. Ursula von der Leyen, the head of the EU, was on the phone and the EU is making very good progress. They were off to a slow start.'
The threat from the Trump administration is that if the August 1 deadline is not adhered to, those countries go back to the April 2 tariff levels. Most of those are minor trading partners of the US and are likely outside America's 18 important trading relationships that account for 95 per cent of the country's trade deficit.
India deal may be soon
However, Bessent has indicated that no major trading partner will be slapped with tariffs as high as 70 per cent and that several deals are close. Bessent said: 'We are close to several deals as always. There's a lot of foot-dragging on the other side and, you know, so I would expect to see several big announcements over the next couple of days.'
He declined to name specific countries, saying: 'I'm not going to name names because I don't want to let them off the hook.'
White House Press Secretary Karoline Leavitt last week had said that India remains a very strategic ally in the Asia-Pacific, and the President has a very good relationship with Prime Minister Narendra Modi — and he will continue to have that.
'The President said last week [that the US and India are very close to a trade deal], and it remains true. I just spoke to our Secretary of Commerce about it. He was in the Oval Office with the President. They are finalising these agreements, and you'll hear from the President and his trade team very soon when it comes to India,' Leavitt said.