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Economic Times
6 days ago
- Business
- Economic Times
Missed signals, lost deal: How India-US trade talks have reached a standstill
Donald Trump administration officials have indicated that more negotiations are needed with India before a trade deal can be sealed. After five rounds of trade negotiations, Indian officials were so confident of securing a favourable deal with the United States that they even signalled to the media that tariffs could be capped at 15%. Indian officials expected U.S. President Donald Trump to announce the deal himself weeks before the August 1 deadline. The announcement never came. New Delhi is now left with the surprise imposition of a 25% tariff on Indian goods from Friday, along with unspecified penalties over oil imports from Russia, while Trump has closed larger deals with Japan and the EU, and even offered better terms to arch-rival Pakistan. Interviews with four Indian government officials and two U.S. government officials revealed previously undisclosed details of the proposed deal and an exclusive account of how negotiations collapsed despite technical agreements on most issues. The officials on both sides said a mix of political misjudgment, missed signals and bitterness broke down the deal between the world's biggest and fifth-largest economies, whose bilateral trade is worth over $190 billion. The White House, the U.S. Trade Representative office, and India's Prime Minister's Office, along with the External Affairs and Commerce ministries, did not respond to emailed requests for comment. India believed that after visits by Indian Trade Minister Piyush Goyal to Washington and U.S. Vice President J.D. Vance to Delhi, it had made a series of deal-clinching concessions. New Delhi was offering zero tariffs on industrial goods that formed about 40% of U.S. exports to India, two Indian government officials told Reuters. Despite domestic pressure, India would also gradually lower tariffs on U.S. cars and alcohol with quotas and accede to Washington's main demand of higher energy and defence imports from the U.S., the officials said. "Most differences were resolved after the fifth round in Washington, raising hopes of a breakthrough," one of the officials said, adding negotiators believed the U.S. would accommodate India's reluctance on duty-free farm imports and dairy products from the U.S. It was a miscalculation. Trump saw the issue differently and wanted more concessions. "A lot of progress was made on many fronts in India talks, but there was never a deal that we felt good about," said one White House official. "We never got to what amounted to a full deal - a deal that we were looking for." Prime Minister Narendra Modi, who visited Washington in February, agreed to target a deal by fall 2025, and more than double bilateral trade to $500 billion by 2030. To bridge the $47 billion goods trade gap, India pledged to buy up to $25 billion in U.S. energy and boost defence imports. But officials now admit India grew overconfident after Trump talked up a "big" imminent deal, taking it as a signal that a favourable agreement was in hand. New Delhi then hardened its stance, especially on agriculture and dairy, two highly sensitive areas for the Indian government. "We are one of the fastest growing economies, and the U.S. can't ignore a market of 1.4 billion," one Indian official involved in the negotiations said in mid-July. Negotiators even pushed for relief from the 10% average U.S. tariff announced in April, plus a rollback of steel, aluminium and auto duties. Later, India scaled back expectations after the U.S. signed trade deals with key partners including Japan, and the European Union, hoping it could secure a similar 15% tariff rate with fewer concessions. That was unacceptable to the White House. "Trump wanted a headline-grabbing announcement with broader market access, investments and large purchases," said a Washington-based source familiar with the talks. An Indian official acknowledged New Delhi wasn't ready to match what others offered. South Korea, for example, struck a deal just before Trump's August 1 deadline, securing a 15% rate instead of 25% by offering $350 billion in investments, higher energy imports, and concessions on rice and beef."At one point, both sides were very close to signing the deal," said Mark Linscott, a former U.S. Trade Representative who now works for a lobby group that is close to the discussions between the two nations. "The missing component was a direct line of communication between President Trump and Prime Minister Modi." A White House official strongly disputed this, noting other deals had been resolved without such intervention. An Indian government official involved in the talks said Modi could not have called, fearing a one-sided conversation with Trump that could put him on the spot. However, the other three Indian officials said Trump's repeated remarks about mediating the India-Pakistan conflict further strained negotiations and contributed to Modi not making a final call. "Trump's remarks on Pakistan didn't go down well," one of them said. "Ideally, India should have acknowledged the U.S. role while making it clear the final call was ours." A senior Indian government official blamed the collapse on poor judgment, saying top Indian advisers mishandled the process. "We lacked the diplomatic support needed after the U.S. struck better deals with Vietnam, Indonesia, Japan and the EU," the official said. "We're now in a crisis that could have been avoided." Trump said on Tuesday he would increase the tariff on imports from India from the current rate of 25% "very substantially" over the next 24 hours and alleged that New Delhi's purchases of Russian oil were "fuelling the war" in are ongoing, with a U.S. delegation expected in Delhi later this month and Indian government officials still believe the deal can be salvaged from here. "It's still possible," one White House official said. The Indian government is re-examining areas within the farm and dairy sectors where concessions can be made, the fourth official said. On Russian oil, India could reduce some purchases in favour of U.S. supplies if pricing is matched. "It likely will require direct communication between the prime minister and the president," said Linscott. "Pick up the phone. Right now, we are in a lose-lose. But there is real potential for a win-win trade deal."
01-08-2025
- Business
Trump's new tariffs give some countries a break, while shares and US dollar sink
BANGKOK -- U.S. President Donald Trump's new tariff rates of up to 41% on U.S. imports from dozens of countries drew expressions of relief Friday from some countries that negotiated a deal or managed to whittle them down from rates announced in April. Others expressed disappointment or frustration over running out of time after hitting Trump's Aug. 1 deadline for striking deals with America's trading partners. The new rates are due to take effect on Aug. 7, but uncertainty over what Trump might do next remains. The way ahead for China, which runs the largest trade surplus with the U.S., is unclear after talks earlier this week in Stockholm produced no deal. Trump has yet to say if he'll extend an Aug. 12 pause on painfully high import duties on Chinese products. The reaction from financial markets was muted. Benchmarks fell in Asia, with South Korea's Kospi dropping nearly 4% after the tariff rate for the U.S. ally was set at 15%. The U.S. dollar weakened against the Japanese yen, trading at more than 150 yen per dollar. Canadian Prime Minister Mark Carney said his government was disappointed by Trump's move to raise the U.S. tariff on goods from America's northern neighbor to 35% from 25%, effective Friday. Goods transshipped from unspecified other countries face a 40% import duty. Trump cited what he said was a lack of cooperation in stemming trafficking in illicit drugs across the northern border. He also slammed Canada's plan to recognize a Palestinian state and has expressed frustration with a trade deficit largely fueled by U.S. oil purchases. 'Canada accounts for only 1% of U.S. fentanyl imports and has been working intensively to further reduce these volumes,' Carney said in a statement. Many of Canada's exports to the U.S. are covered by the U.S.-Mexico-Canada Agreement and face no tariff. But steel, lumber, aluminum and autos have been subject to still higher tariffs. Switzerland was reeling after Trump ordered a 39% tariff rate for the land of luxury watches, pharmaceuticals and financial services. That was up from his original proposal of a 31% duty. 'The Federal Council notes with great regret that, despite the progress made in bilateral talks and Switzerland's very constructive stance from the outset, the U.S. intends to impose unilateral additional tariffs on imports from Switzerland,' the government said in a post on X. It said it would continue to seek a negotiated solution. New Zealand officials said Friday they would keep lobbying Trump to cut the 15% tariff he announced for their country's exports to the U.S., up from the original 10% baseline set in April. 'We don't think this is a good thing. We don't think it's warranted,' Trade Minister Todd McClay told Radio New Zealand. The exporter of meat, dairy, wine and farm machinery ran a $1.1 billion trade surplus with the U.S. in 2024, according to U.S. Trade Representative data. McClay said New Zealand exporters had reported they could absorb a 10% tariff or pass it on to U.S. consumers through increased costs. A further increase would 'change the equation,' he said. Neither New Zealand nor its neighbor Australia have struck tariff deals with the Trump administration. Australian steel and aluminum exports have faced a steep 50% tariff since June. Australian Trade Minister Don Farrell said the 10% overall tariff on Australia's exports to the United States was a vindication of his government's 'cool and calm negotiations.' But he said even that level was not justified. The U.S. exports twice as much to Australia as it imports from its bilateral free trade partner, and Australia imposes no tariffs on U.S. exports. Objecting to a 15% tariff rate, Norwegian Prime Minister Jonas Gahr Støre told the newspaper VG the Scandinavian country should have 'zero tariffs." He said talks were continuing. Japanese Chief Cabinet Secretary Yoshimasa Hayashi was cautious in welcoming Trump's executive order setting Japan's tariff at 15% after the two sides worked out an agreement, much to Tokyo's relief. 'We believe it is necessary to carefully examine the details of the measure," Hayashi said. 'The Japanese government will continue to urge the U.S. side to promptly implement measures to carry out the recent agreement, including reducing tariffs on automobiles and auto parts.' Taiwan's President Lai Ching-te said the self-ruled island had yet to engage in final negotiations with the U.S. side owing to scheduling difficulties and that he was hopeful the final tariff rate would be reduced even further after a final round of talks. The Trump administration lowered its tariff for Taiwan to 20% from the originally proposed 32%. Taiwan is a key supplier of advanced semiconductors needed for many products and technologies. '20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Lai told reporters in Taipei Friday. The U.S. is Taiwan's largest ally even though it does not formally recognize the island. 'We want to strengthen U.S. Taiwan cooperation in national security, tech, and multiple areas,' Lai said. Cambodia's Deputy Prime Minister Sun Chanthol, who led his nation's trade talks with the United States, thanked Trump for setting the tariff rate on Cambodian goods at 19% and said his country will impose zero tariffs on American goods. The rate for Cambodia that Trump proposed in April was 49%, one of the highest in the world. He said the U.S. estimated average Cambodian tariffs on U.S. exports at 97%. Cambodia has agreed to up purchases of U.S. goods. Sun said it would purchase 10 passenger aircraft from Boeing in a deal they hoped to sign later this month. Several other nations had already announced similar aircraft purchase deals as part of their trade packages. Trump had threatened to withhold trade deals from Cambodia and Thailand if they didn't end an armed conflict over border territory. The two nations agreed on a ceasefire that began Tuesday. Thailand also is subject to a 19% tariff, a rate that its Finance Minister Pichai Chunhavajira said 'reflects the strong friendship and close partnership between Thailand and the United States.' That was down from 36% proposed earlier. "The outcome of this negotiation signals that Thailand must accelerate its adaptation and move forward in building a stable and resilient economy, ready to face global challenges ahead," he said. Pakistan welcomed a trade deal that sets a 19% duty on its exports, lower than the initial plan for 29%, saying in a government statement that it was a 'balanced and forward-looking approach' that could boost trade and economic growth. For Bangladesh, a new 20% tariff warded off an earlier threat of a 35% import duty for the South Asian exporter of garments and other light manufactured goods. 'That's good news for our apparel sector and the millions who depend on it,' said Khalilur Rahman, the country's national security advisor and lead negotiator. "We've also preserved our global competitiveness and opened up new opportunities to access the world's largest consumer market' Rahman said. 'Protecting our apparel industry was a top priority, but we also focused our purchase commitments on U.S. agricultural products. This supports our food security goals and fosters goodwill with U.S. farming states.'
Boston Globe
01-08-2025
- Business
- Boston Globe
Trump's new tariffs give some countries a break, while shares and US dollar sink
The reaction from financial markets was muted. Benchmarks fell in Asia, with South Korea's Kospi dropping nearly 4% after the tariff rate for the U.S. ally was set at 15%. The U.S. dollar weakened against the Japanese yen, trading at more than 150 yen per dollar. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up For Canada and Switzerland, regret and disappointment Canadian Prime Minister Mark Carney said his government was disappointed by Trump's move to raise the U.S. tariff on goods from America's northern neighbor to 35% from 25%, effective Friday. Goods transshipped from unspecified other countries face a 40% import duty. Trump cited what he said was a lack of cooperation in stemming trafficking in illicit drugs across the northern border. He also slammed Canada's plan to recognize a Palestinian state and has expressed frustration with a trade deficit largely due to U.S. oil purchases. Advertisement 'Canada accounts for only 1% of U.S. fentanyl imports and has been working intensively to further reduce these volumes,' Carney said in a statement. Many of Canada's exports to the U.S. are covered by the U.S.-Mexico-Canada Agreement and face no tariff. But steel, lumber, aluminum and autos have been subject to still higher tariffs. Switzerland was reeling after Trump ordered a 39% tariff rate for the land of luxury watches, pharmaceuticals and financial services. That was up from his original proposal of a 31% duty. 'The Federal Council notes with great regret that, despite the progress made in bilateral talks and Switzerland's very constructive stance from the outset, the U.S. intends to impose unilateral additional tariffs on imports from Switzerland,' the government said in a post on X. It said it would continue to seek a negotiated solution. Still working on it New Zealand officials said Friday they would keep lobbying Trump to cut the 15% tariff he announced for their country's exports to the U.S., up from the original 10% baseline set in April. 'We don't think this is a good thing. We don't think it's warranted,' Trade Minister Todd McClay told Radio New Zealand. The exporter of meat, dairy, wine and farm machinery ran a $1.1 billion trade surplus with the U.S. in 2024, according to U.S. Trade Representative data. McClay said New Zealand exporters had reported they could absorb a 10% tariff or pass it on to U.S. consumers through increased costs. A further increase would 'change the equation,' he said. Neither New Zealand nor its neighbor Australia have struck tariff deals with the Trump administration. Australian steel and aluminum exports have faced a steep 50% tariff since June. Advertisement Australian Trade Minister Don Farrell said the 10% overall tariff on Australia's exports to the United States was a vindication of his government's 'cool and calm negotiations.' But he said even that level was not justified. The U.S. exports twice as much to Australia as it imports from its bilateral free trade partner, and Australia imposes no tariffs on U.S. exports. Japan watches, while Taiwan keeps trying for a deal Japanese Chief Cabinet Secretary Yoshimasa Hayashi was cautious in welcoming Trump's executive order setting Japan's tariff at 15% after the two sides worked out an agreement, much to Tokyo's relief. 'We believe it is necessary to carefully examine the details of the measure,' Hayashi said. 'The Japanese government will continue to urge the U.S. side to promptly implement measures to carry out the recent agreement, including reducing tariffs on automobiles and auto parts.' Taiwan's President Lai Ching-te said the self-ruled island had yet to engage in final negotiations with the U.S. side owing to scheduling difficulties and that he was hopeful the final tariff rate would be reduced even further after a final round of talks. The Trump administration lowered its tariff for Taiwan to 20% from the originally proposed 32%. Taiwan is a key supplier of advanced semiconductors needed for many products and technologies. '20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Lai told reporters in Taipei Friday. The U.S. is Taiwan's largest ally even though it does not formally recognize the island. 'We want to strengthen U.S. Taiwan cooperation in national security, tech, and multiple areas,' Lai said. For some trading partners, relief that tariffs are lower than they might be Cambodia's Deputy Prime Minister Sun Chanthol, who led his nation's trade talks with the United States, thanked Trump for setting the tariff rate on Cambodian goods at 19% and said his country will impose zero tariffs on American goods. Advertisement The rate for Cambodia that Trump proposed in April was 49%, one of the highest in the world. He said the U.S. estimated average Cambodian tariffs on U.S. exports at 97%. Cambodia has agreed to up purchases of U.S. goods. Sun said it would purchase 10 passenger aircraft from Boeing in a deal they hoped to sign later this month. Several other nations had already announced similar aircraft purchase deals as part of their trade packages. Trump had threatened to withhold trade deals from Cambodia and Thailand if they didn't end an armed conflict over border territory. The two nations agreed on a ceasefire that began Tuesday. Thailand also is subject to a 19% tariff, a rate that its Finance Minister Pichai Chunhavajira said 'reflects the strong friendship and close partnership between Thailand and the United States.' That was down from 36% proposed earlier. 'The outcome of this negotiation signals that Thailand must accelerate its adaptation and move forward in building a stable and resilient economy, ready to face global challenges ahead,' he said. For Bangladesh, a new 20% tariff warded off an earlier threat of a 35% import duty for the South Asian exporter of garments and other light manufactured goods. 'That's good news for our apparel sector and the millions who depend on it,' said Khalilur Rahman, the country's national security advisor and lead negotiator. 'We've also preserved our global competitiveness and opened up new opportunities to access the world's largest consumer market' Rahman said. 'Protecting our apparel industry was a top priority, but we also focused our purchase commitments on U.S. agricultural products. This supports our food security goals and fosters goodwill with U.S. farming states.' Advertisement AP journalists from around the world contributed to this report.
The Hill
30-07-2025
- Business
- The Hill
The grievance that could be the undoing of Trump's Brazil trade probe
On July 15, the Trump administration opened a Section 301 investigation into Brazil's trade practices. The probe targets Brazil's 'acts, policies and practices' across six wide-ranging areas: digital trade, preferential tariffs, anti-corruption, intellectual property protection, ethanol market access and illegal deforestation. Some of these grievances are longstanding, like the one about ethanol. Deforestation is of more recent vintage. Bundling all six into a big sprawling case will make it harder to negotiate targeted solutions. But the one about Brazil granting Mexico and India preferential tariff treatment could end talks before they even begin. Before turning to why, consider what's at stake in this investigation. U.S. digital service providers face a wide variety of subtle and not-so-subtle barriers to doing business in Brazil. They need fair market access. U.S. ethanol exporters also need relief from Brazil's on-again, off-again tariffs. They've been put through the wringer. Then there's America's innovators, who have waited patiently for this probe for decades. The U.S. Trade Representative has long raised concerns about Brazil's failure to adequately protect and enforce intellectual property. Since 1999, every single U.S Trade Representative Special 301 Report has called out Brazil for excessive patent pendency. The average delay is nearly seven years; for pharmaceuticals, it's almost a full decade. This keeps cutting-edge treatments developed by U.S. firms on the outside looking in on Brazil, waiting for proper intellectual property protection. Also, Brazil's lack of regulatory data protection for confidential pharmaceutical test data is a violation of the country's international commitments, and discriminatory. Indeed, Brazil provides regulatory test data protection for veterinary, fertilizer and agrochemical products. Other concerns about Brazil's intellectual property regime persist as well, including inconsistent copyright enforcement, the widespread availability of pirated and sale of counterfeit goods and opaque procedures related to the recognition of geographical indications, for example. These issues alone warrant a Section 301 investigation. But they, like digital trade and ethanol concerns, risk being overshadowed by the ill-defined complaint about Brazil's 'partial scope' agreements. Here's the issue. Brazil, alone and as a member of the Mercosur trade bloc (which includes Argentina, Paraguay and Uruguay), has several partial scope agreements, including one with Mexico and another with India. Congress doesn't like these deals because they fall short of the World Trade Organization's requirement that bona fide free trade agreements are supposed to cover 'substantially all trade.' Both Brazil-Mexico and Mercosur-India want to get there. As Brazil explained to the U.S. and others in attendance at a World Trade Organization 'transparency exercise,' the plan for its pact with Mexico is that it will include 'commitments in all areas that made a modern trade agreement.' Likewise, Article 2 of Mercosur-India sets out that the parties are committed to evolving the pact into a fully-fledged free trade area. It's important to note that neither Brazil-Mexico nor Mercosur-India was mentioned in the 2025 National Trade Estimate Report. In fact, the U.S. Trade Representative didn't raise any questions about either deal in Brazil's 2022 World Trade Organization Trade Policy Review. So, what exactly is this grievance? Is it that these transitions aren't credible? Or that they're not sufficiently ambitious? If it's about the timelines, this will hurt U.S. trade relations with developing countries more generally. There are 27 partial scope agreements in today's global economy. Demanding that they turn into free trade deals on Washington's clock, backed by threats of punitive tariffs, would drive poor nations further into China's arms. Indeed, Beijing is giving them zero tariffs whereas Congress can't seem to renew the Generalized System of Preferences. If it's about 'substantially all trade,' the U.S. will have an even bigger fight on its hands. The WTO doesn't define what this means. The closest it comes is to say it's 'not the same as all trade' but 'considerably more than merely some of the trade.' The Trump administration can ask tough questions, but to dictate benchmarks and back them up with enforcement actions would pit America against many — if not all — of its trade partners. Finally, regardless of which way this grievance goes, Brazil can't address it on its own. Mexico, India and Mercosur have skin in the game. This will further distract Brazil from the other five issues. Trump's Section 301 investigation of Brazil is big, brash, and too clever by half. U.S. exporters need a more focused, clearly defined action if they're to benefit. No one has more on the line than America's innovators. Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University.
Hans India
29-07-2025
- Business
- Hans India
South Korean shipbuilders' global order share rises amid US-China tension
Seoul: South Korean shipbuilders saw a significant rebound in their global order share in the first half amid US sanctions targeting Chinese rivals, an industry report showed on Tuesday. According to the report from the Export-Import Bank of Korea, South Korea secured 25.1 percent of global shipbuilding orders in terms of compensated gross tons (CGT) during the January-June period, reports Yonhap news agency. It marks a substantial rise from 17.2 percent a year earlier, narrowing the gap with leader China from 51 percentage points to 26.7 percentage points. Last year, South Korea's share of global annual orders stood at 15 percent, the lowest in eight years. This year's rebound is largely attributed to recent U.S. trade measures. The U.S. Trade Representative (USTR) has introduced a policy to impose port entry fees on Chinese shipping companies and operators of Chinese-built vessels, effectively discouraging reliance on Chinese shipyards. In the first half of the year, container ships accounted for 53.3 percent of South Korea's total order volume of 4.87 million CGT. Last year, South Korean shipyards secured just two midsize-to-large container ship orders. "The shift in orders from Chinese to Korean shipbuilders amid U.S. sanctions has contributed to the increase in Korea's global market share," the report said. Despite the improved performance, the bank stressed the need for South Korea's shipbuilding industry to use this opportunity to enhance its fundamental competitiveness for long-term resilience. Meanwhile, South Korea ranked second in new global shipbuilding orders in June, industry data showed. South Korean shipyards clinched orders totaling 1.05 million compensated gross tons (CGTs) for eight ships, accounting for 41 percent of the global total at 2.56 million CGTs last month, according to London-based Clarkson Research Services. China ranked first, taking up 53 percent of the global total. In terms of order backlog, China ranked first with 96.82 million CGTs, or 59 percent of the global total of 163.37 million CGTs as of the end of June, with South Korea trailing in second with 35.42 million CGTs, accounting for 22 percent of the total. Clarkson's Newbuilding Price Index, a barometer of price changes in newly built ships, came to 187.11 last month, up 0.42 point from a year ago.
