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Why Trump is Not Signing any Trade Deal with India

Trump wants to narrow trade deficit with India. But India does not want to give any concessions to American goods. This trade deal may not help Trump’s protectionist policy instead it may bloat up the trade deficit of US.

Trump

US President Donald Trump said he was unsure that he may sign a trade deal with India when he visits the country later this month. It can be said that the trade deal may be signed after the 2020 election – if he wins.

“We can have a trade deal with India, but I’m really saving the big deal for later on,” Trump stated in press conference. “We’re doing a very big trade deal with India. We’ll have it. I don’t know if it’ll be done before the election, but we’ll have a very big deal with India.”

Trump Complaints India’s Treatment on Trade

The president added that he happens “to like Prime Minister [Narendra] Modi a lot,” but said the United States was “not treated very well by India,” presumably referring to tariffs the country maintains on a number of American goods.

Though the ongoing trade negotiations have run into snags in recent weeks, India has made a number of moves to sweeten the pot for a deal. New Delhi is resisting demands that it boost purchases of US agricultural goods.

Read more: India building wall to hide slums during Trump’s visit

Why Trump is Avoiding Deal? Current Trade between US and India
Trump wants to narrow trade deficit with India. But India does not want to give any concessions to American goods. This trade deal may not help Trump’s protectionist policy instead it may bloat up the trade deficit of US.

U.S. goods and services trade with India is about $142 billions. In 2018, the US exports were $58.7 billion; imports were $83.9 billion. Goods exports totaled $33.5 billion; goods imports totaled $54.3 billion. The U.S. goods trade deficit with India was $20.8 billion in 2018. This is why the trade deal is difficult to negotiate. Neither country wants to end up in deal which would harm its exports.

What Does India Has to Say about the Deal

Indian trade officials have signaled that they are open to dropping duties on a few US farm goods, Moreover, they suggested a significant tariff cut for Harley-Davidson motorcycles, now taxed at 50 percent. An earlier proposal would see India buy $2.6 billion in helicopters from US arms producer Lockheed Martin, while the State Department has approved another $1.9 billion contract for US-made missiles, radars and training gear.

Read more: India’s annual growth slows to 5% as New Delhi vows revival

With Trump’s latest statement and negotiations on the rocks and insufficient concessions by India may not be enough to obtain a deal of any size on Trump’s visit. Trade tensions between Washington and New Delhi reached new heights last year after the US pulled India from its “Generalized System of Preferences” (GSP). GSP grants tariff exemptions to certain favored allies. While the decision was meant to encourage India to drop levies on US goods, it backfired, resulting in a number of retaliatory tariffs on dozens of American products. Bilateral tensions have increased over each side’s tariff policies. India has relatively high average tariff rates, especially in agriculture.

News Desk with Inputs from RT.

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