Amidst a backdrop of escalating global trade tensions, US President Donald Trump has declared that the United States is "close to making a deal with India". This announcement comes as the Trump administration has simultaneously slapped fresh tariffs on 14 nations, signaling a continued aggressive approach to reshaping international trade relationships.
In a statement on Tuesday, July 8, 2025, Trump highlighted progress in trade talks with India, alongside deals with the United Kingdom and China. He stated that the US has "spoken to everybody...it's all done" and that the US is close to finalizing an agreement with India.
However, this optimistic outlook is juxtaposed with the imposition of new tariffs on 14 countries, set to take effect on August 1, 2025. The countries facing these new trade measures include Japan, South Korea, Bangladesh, Bosnia and Herzegovina, Cambodia, Indonesia, Kazakhstan, Lao People's Democratic Republic, Malaysia, Myanmar, Republic of Serbia, Republic of Tunisia, South Africa, and Thailand. Myanmar and Laos will be hit hardest, with a 40% tariff rate. Japan and South Korea will face a 25% levy.
The tariffs were detailed in official letters shared by Donald Trump on his Truth Social account. Trump warned against retaliatory measures, stating that any tariff increases by these countries would be added to the tariffs the U.S. charges. He justified the tariffs as "necessary to correct the many years of tariff and non-tariff policies and trade barriers" that have resulted in "unsustainable trade deficits against the United States". According to Trump, these deficits pose "a major threat to our economy and indeed our national security".
White House press secretary Karoline Leavitt said that the Trump administration is "close" to finalizing agreements with several other trading partners and that Trump "wants to ensure these are the best deals possible".
The move has been met with uncertainty from businesses, markets, and policymakers, who are facing difficulties planning for production, inventory, hiring, and inflation due to the frequent changes to tariffs.
India has reportedly set its "red lines" in the ongoing trade negotiations with the US, particularly concerning agriculture and dairy sectors. India seeks complete exemption from the 26% tariffs. According to Indian officials, the decision on the mini or interim trade deal now rests with America.
India's Minister of Trade and Industry, Piyush Goyal, has stated that India is ready to make trade deals in the national interest, but not just to meet deadlines. He emphasized that "National interest will always be supreme" and that India will only accept a deal when it is completely finalized and in the national interest.
Negotiations between the US and India have faced roadblocks over disagreements on import duties for car components, steel, and farm goods. India is resisting opening up its agriculture and dairy sectors while seeking a favorable tariff for its goods entering the US compared to countries like Vietnam and China. The US is reportedly pushing India to open its market to genetically modified (GM) crops, which India has resisted due to concerns for its farmers.
Despite these disagreements, there are indications that a "mini trade deal" could be finalized soon. CNBC-TV18 reported that India and the United States may finalize a mini trade deal in the next 48 hours. Negotiations for a larger deal will commence after July 9. The mini trade deal is expected to have average tariffs of 10%.
India has also not hesitated to turn to multilateral forums, issuing notices at the World Trade Organization reserving the right to retaliate against US safeguard duties on auto parts, steel and aluminium. India has proposed retaliatory tariffs that could impact $2.89 billion worth of US imports annually.
