President Donald Trump on Tuesday threatened to raise tariffs on Indian imports as high as 25% if the allied nations cannot complete a long-sought trade agreement.
“They are going to pay 25%,” Trump said.
When asked by a reporter if India would pay tariffs of 20% to 25%, Trump said, “Yeah, I think so. India has been – they’re my friends.”
US Trade Representative Jamieson Greer told CNBC Monday that an elusive India trade agreement would require more discussion between the two countries.
“They have expressed strong interest in opening portions of their market, we of course are willing to continue talking to them,” Greer said. “But I think we need some more negotiations on that with our Indian friends to see how ambitious they want to be.”
Trump in recent trade agreements has doubled down on countries opening up previously closed markets to US goods. But neither side has highlighted particular sticking points, and India’s commerce minister last week sounded an optimistic tone about the chance of reaching an agreement with the United States before Trump’s self-imposed August 1 deadline.
Although Trump has not yet threatened India with a letter setting a new tariff, as he has done for more than a dozen other trading partners, Trump had set the tariff on Indian goods imported to the United States at 26% on April 2 before pausing those “reciprocal” levies.
Trump has called America’s trade relationship with India “very tough.” He has criticized India as the US goods trade deficit with that nation bas ballooned, doubling over the past decade as trade between the two countries has increased. Trump has also frequently complained about India’s high tariffs.
“They charge more tariffs than any other country,” Trump said on February 13, hours before he met with Prime Minister Narendra Modi. Trump later mentioned that he told Modi when he met with him, “You’re not treating us right.”
But the White House has taken particular issue with India’s so-called non-tariff trade barriers, including taxes on digital services. The Trump administration has also criticized India for restrictive regulations on foreign imports, including what it calls “uniquely burdensome” testing requirements.
Last year, the US imported $87 billion worth of goods from India, according to Commerce Department data. Meanwhile, India imported $42 billion worth of goods from the US. The top goods the US received from India last year included pharmaceuticals; communications equipment, such as smartphones; and apparel.
Trump and his administration for months have said a deal with India was nearly done. In mid-May, Trump claimed that India had agreed to levy zero tariffs on US exports – a claim that India immediately rebutted.
“India is the highest — one of the highest tariff nations in the world. It’s very hard to sell into India, and they’ve offered us a deal where, basically, they’re willing to literally charge us no tariff,” Trump said May 15 during a roundtable with business leaders in Doha, Qatar.
But India’s foreign minister, S. Jaishankar, later called the announcement “premature.” He said nothing had been decided, calling negotiations between New Delhi and Washington “complicated” and “intricate.”
CNN’s Elisabeth Buchwald contributed to this report.