India-US mini trade deal: Will the mega problem remain?
On the surface, a mini trade deal may seem like a diplomatic breakthrough, but this reprieve might be temporary. The Trump doctrine of aggressive, transactional diplomacy means that India might continue to face erratic trade pressure from the US even after a short-term agreement is inked.
Also Read: How India can play hardball with Trump and win
Unresolved core disputes
At the heart of the stalled trade talks are India's dairy and agriculture sectors, the areas that have remained politically sensitive and economically vital for the Indian government. The US has long demanded broader market access for its dairy and agricultural products, citing non-tariff barriers and regulatory restrictions as unfair protectionism. India, on the other hand, has made it clear that these sectors are non-negotiable.
Indian dairy, for instance, is heavily reliant on small farmers, and allowing US dairy, especially from hormone-treated and meat-fed cattle, into the Indian market could devastate domestic producers and will be culturally unacceptable. Similarly, agricultural subsidies and minimum support prices form the backbone of India's rural economy and food security strategy. These cannot be compromised without causing political and social unrest. Even if these issues are temporarily sidestepped in a mini trade deal, they remain ticking time bombs for future negotiations.
Live Events
Trump's tariff diplomacy as a pressure tactic
Trump has turned tariffs into a geopolitical weapon. From China to the EU to even traditional allies like Canada and Mexico, Trump has shown that he's willing to use tariff threats not just for trade imbalances but also for diplomatic leverage. India is no exception. In fact, Trump has repeatedly claimed that he threatened India with tariffs to deter it from going to war with Pakistan, a highly questionable but revealing statement which has been vigorously refuted by India.
This shows that trade under Trump is not just about economics, but about dominance and unpredictability. Even if a mini deal is signed now, it does not ensure lasting calm. Trump could very well return with fresh demands, unrelated to trade, and use tariff threats to enforce compliance, whether on strategic alignments, defense purchases, or even foreign policy decisions like India's stance on Russia.
Perhaps the biggest challenge in dealing with Trump is the absence of predictability. His sudden moves or tweeting tariff threats at odd hours make it nearly impossible for long-term planning. For India, this means that even sectors that have not yet come under pressure could be dragged into future conflicts at any time. A mini deal might create short-term relief, but it is no shield against future policy reversals or impulsive trade actions.
Commerce Minister Piyush Goyal has publicly stated that India will not work under any deadline pressure. This is a strong and principled stance. But deadlines aren't the only tools Trump uses. He is equally effective with ambiguity and sudden policy shifts. The absence of a formal deadline does not mean India will be free from coercive tactics. A tweet, a press conference or a sudden tariff hike can achieve what a deadline might fail to do. Moreover, India's relative dependence on the US for exports, especially in the services and pharmaceutical sectors, makes it vulnerable to punitive actions, even if not directly related to dairy or agriculture.
India's foreign policy has historically emphasized strategic autonomy. But under Trump's transactional worldview, strategic autonomy can be seen as resistance. Whether it's India buying oil from Iran, procuring defense equipment from Russia or taking a neutral stance in US-China rivalry, Trump has often viewed such moves as acts of defiance. This will put India in a difficult position. Any attempt to assert its national interest in global affairs could be punished through tariffs or trade threats. A mini deal, therefore, does not offer protection from the possibility of Trump's coercive actions. "Trump's model isn't a free trade agreement, it's a YATRA - Yielding to American Tariff Retaliation Agreement," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava has said.
A mini trade deal between India and the US, if announced, will be a welcome development for India, but it may still have the big task of building long-term economic resilience and diversifying its trade partnerships.
Economic Times WhatsApp channel
)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
21 minutes ago
- Economic Times
Trump's silent economic war on China: How he's cornering Xi Jinping one nation at a time
Donald Trump is reportedly broadening his trade war with China by imposing tariffs on Asian nations like Japan and South Korea. Simultaneously, deals are being pursued with countries including Indonesia and Thailand. This strategy aims to isolate China by restricting access to crucial Asian markets that bolster its export-driven economy. Tired of too many ads? Remove Ads Donald Trump Targeting Asia to Corner Beijing Setting the Tone with Vietnam and the UK Tired of too many ads? Remove Ads Donald Trump Cracking Down on Transshipments More Asian Countries on Trump's Notice China's Growth Model Hinges on Exports Tired of too many ads? Remove Ads FAQs US president Donald Trump is quietly expanding his trade war with China by targeting the entire Asian region through a series of new tariff deals, as per a though the US reached a recent pact with Beijing, Trump is imposing fresh tariffs on countries like Japan and South Korea while pushing for agreements with Indonesia, Thailand, Cambodia, and others, according to The Telegraph successful, this strategy would trap Xi Jinping's China by cutting off key Asian markets that support Beijing's export-driven economy , as per the report. Economist at Capital Economics, Neil Shearing, pointed out that 'What we are witnessing is no passing trade war,' and added that, 'Rather, it is the manifestation of a deeper, more durable superpower rivalry between the world's two largest economies,' as quoted in The Telegraph READ: Billionaires ditch Nvidia for this AI stock that's soared 2,000% since 2023 Trump's earlier deals with the UK and Vietnam set the tone for his plan to weaken Beijing's trading power, according to the report. The UK agreement allows the White House to 'veto' Chinese investment in Britain, while the Vietnam deal cracks down on China's tactic of sending goods through Vietnam to avoid US tariffs, as per The Telegraph instance, Trump imposed a 40% tariff on 'transshipments', goods imported into Vietnam mostly from China, then exported to the US, which is double the 20% tariff on Vietnamese-made products. This sends a clear message to Hanoi that Vietnam is welcome to export to the US if it can cope with a 20% levy, Trump will come down on the country like a tonne of bricks if it replaces 'Made in Vietnam' stickers with 'Made in China,' as reported by The READ: Craving McDonald's snack wraps? They are back — with bold new flavors you need to try Trump is now threatening steep tariffs on Malaysia, Indonesia, Thailand, and Cambodia if they don't make trade deals soon, with levies as high as 36% on some countries, as these measures are expected to further squeeze China's export reach, according to the was Trump's early candidate for this strategy because, since Trump first came to power in 2017, China's machinery and electrical goods shipments to Vietnam have increased from just 17% of its total exports to nearly half, as reported by The Telegraph. After Trump returned to the White House this year, Vietnam's imports of these goods from China rose by nearly a quarter, as per the READ: Linda Yaccarino resigns: What drove the X CEO to step down and what's her net worth? Xi's strategy is to keep China's economy increasing by at least 5% a year due to the exports to Asia, reported The Telegraph. Beijing increases its GDP by pumping subsidies and investments into manufacturing, as Chinese households simply don't spend enough to allow consumption to power the economy, as reported by The Telegraph.A senior research fellow at the think tank Chatham House, David Lubin explained that, 'Whenever Chinese domestic spending growth sags, export growth accelerates,' adding, 'And that's simply because Chinese companies can't sell stuff domestically, so they sell it abroad,' as quoted in the economic model has led to overcapacity and oversupply, which has forced businesses into damaging price wars, and if these companies are not able to export their surplus to Asia, supply gluts appear inevitable, as reported by The READ: New Mexico flooding: Emergency declared - track maps, road closures and all the details He's trying to block China from using Asian markets to fuel its export-heavy penalizing Vietnam with 40% tariffs if it helps China dodge US tariffs by re-exporting Chinese goods.
Time of India
31 minutes ago
- Time of India
Trump praises Liberian President's English during White House meeting — Liberia's unique U.S. history explained
Donald Trump praised the Liberian President Joseph Boakai's English during a White House meeting with African leaders. Trump said, 'Such good English, that's beautiful... Where did you learn to speak so beautifully?' after Boakai spoke, as per the reports. Trump seemed surprised and asked if Boakai was educated in Liberia. English is the official language of Liberia, so it's not unusual that Boakai speaks fluent English. Liberia has many people who are descendants of freed American slaves who were sent to Africa in the 1800s, according to the report by NBC News. ALSO READ: Bill Gates reveals the one profession AI won't replace — not even in a century by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Plastic Surgeon Reveals The 1 Thing Every Woman Should Be Using Instead Of Moisturiser New Skin Discovery Undo Liberia's history and connection to the U.S. The capital of Liberia is called Monrovia, named after the U.S. President James Monroe, who supported sending freed Black Americans to Africa. In the 1800s, American abolitionists and slaveholders disagreed about the future of free Black people in the U.S, as per the reports. A group called the American Colonization Society bought land in West Africa and began sending freed Black people from America there in the 1820s. In 1847, Liberia became independent and created a Constitution based on the U.S. model, as stated in the report by NBC News. Live Events Liberia's Independence and modern status In their Declaration of Independence, Liberia accused the U.S. of racism, violence, and inequality, saying that's why they had to leave. Today, Liberia is the oldest modern republic in Africa, and second-oldest Black-led republic in the world, after Haiti, founded in 1804, as per the reports. ALSO READ: Are you eating chia seeds wrong? Doctor explains side effects and safe way to consume them The White House has not yet responded to Trump's latest comments about Liberia. This is not the first time Trump's comments about African nations caused backlash, as per the reports. In 2018, Trump called African nations and Haiti 'shithole countries', during a meeting with U.S. senators. That comment got strong criticism from Haitian and African leaders at the time, as mentioned in the report by NBC News. FAQs Q1. Why did Trump praise Liberia's president's English? Trump praised Liberia's president Joseph Boakai because Liberia's official language is English, and Boakai spoke fluently during their White House meeting. Q2. What is Liberia's connection to the United States? Liberia was founded by freed American slaves in the 1800s and has strong historical ties to the U.S., including its capital named after President James Monroe.
Time of India
31 minutes ago
- Time of India
Vedanta drops 3% after US short seller calls it 'house of cards', firm hits back
MUMBAI: In a move reminiscent of Hindenburg going short on Adani Group, US-based financial researcher Viceroy Research said Wednesday it was "shorting" the debt stack of metal tycoon Anil Agarwal-controlled Vedanta Resources, the UK-based parent of Mumbai-listed miner Vedanta, as it believes the entire group structure is 'financially unsustainable', operationally compromised, 'a house of cards', poses severe risks to creditors, and 'resembles a Ponzi scheme'. Tired of too many ads? go ad free now Viceroy's 87-page report came ahead of Vedanta's annual shareholder meeting on Thursday. The company dismissed the report as "a malicious combination of selective misinformation and baseless allegations." Vedanta's stock price on BSE crashed nearly 8% in mid-session to a low of Rs 421, but then slowly recovered to close at Rs 441, down 3.4%. The stock of Vedanta subsidiary Hindustan Zinc also saw a similar trend: In mid-session it crashed nearly 5% to Rs 415 and then recovered some ground by the close of the session to finally settle at Rs 425, down 2.6%. Betting on a correction in the prices of the company's securities, Viceroy's report said, 'Our thesis rests on a simple but critical dynamic: Vedanta Resources is a 'parasite' holding company with no significant operations of its own, propped up entirely by cash extracted from its dying 'host', Vedanta.' This, Viceroy added, has forced the Indian company to take on increasing leverage and deplete its cash reserves. 'This looting erodes the fundamental value of Vedanta, which constitutes the primary collateral for Vedanta Resources' own creditors.' Vedanta reacted saying the 'timing of the report is suspect and could be to undermine the forthcoming corporate initiatives'. Vedanta is in the midst of hiving off its businesses such as aluminum, oil and gas, power, and base metals into separate listed companies. The demerger has hit a regulatory roadblock with the petroleum and natural gas ministry raising objections. Tired of too many ads? go ad free now and his family hold about 56% stake in Vedanta. A couple of days ago, Vedanta Resources announced the release of all pledged Vedanta shares following complete repayment of its $200 million Canara Bank (London branch) loan. Viceroy criticised Vedanta's demerger proposal, initiated after an unsuccessful attempt to take the Indian company private five years ago. As of March 31, 2025, Vedanta Resources' standalone net debt was about $5 billion. Delaware-registered Viceroy said Vedanta Resources is a financial zombie being kept alive by transfusions of cash from Vedanta. 'The short thesis is not death by a thousand cuts: Any one of the multitude of risks we outline is sufficient to topple Vedanta's already fragile, Ponzi-like structure.'
