How India is an exception as Donald Trump slaps new tariffs on Asian nations

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US President Donald Trump has yet again said that the deal with India is close. His remarks come even as the US began sending letters to 14 nations, most of them in Asia, about higher tariffs being imposed from August 1 if no trade deals are made. Japan and South Korea will face tariffs of at least 25 per cent if no pact is sealed read more
President Donald Trump shakes hands with Prime Minister Narendra Modi in the Oval Office of the White House. File image/AP
India is negotiating hard with the United States over a bilateral trade agreement (BTA).
US President Donald Trump has yet again said that the deal with India is close.
'We've made a deal with the United Kingdom, we've made a deal with China, we've made a deal - we're close to making a deal with India…Others we met with, we don't think we're going to be able to make a deal. So we just send them a letter', Trump said at the White House.
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Trump made the remarks even as the US began sending letters to 14 nations, most of them in Asia, about higher tariffs being imposed on August 1 failing a deal not being reached with the United States.
Trump had earlier set a deadline of July 9 for countries to reach deals with the United States.
'We're sending out letters to various countries telling them how much tariffs they have to pay. Some will maybe adjust a little bit depending if they have a cause, we're not going to be unfair about it,' the US President said.
India was not among the 14 nations named.
But what do we know about the trade deal with India? Why does Trump need such a deal? And what about the tariffs on other Asian nations?
Let's take a closer look:
Trade deal with India
The trade deal with India is said to be in the offing.
According to reports, the deal could be signed in the next 24 to 48 hours.
The average tariff under the agreement could be around 10 per cent.
Indian negotiators are said to have offered the US substantial market access for their products.
Tariffs on pecan nuts and blueberries are likely to be lowered.
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This does not include India's sensitive dairy and agriculture industry.
India has never opened up its dairy industry to a foreign company.
When it comes to agriculture, India is worried that foreign firms could upset its minimum sales price (MSP) mechanism and is insistent on protecting its farmers.
The US in turn has offered India lower tariffs on certain labour-intensive products such as textiles and footwear.
The US wants to sell genetically modified (GM) crops and soybean in India – the latter of which India has been extremely reluctant to sell.
New Delhi has also pushed back against the US demand to export cow milk to India.
Sources have said that India has given the US its final proposal and the ball is now in Washington's court.
An official told The Hindu that the deal could come today or 'in a day or two'.
Sources have said that India has given the US its final proposal and the ball is now in Washington's court.
A second source added that India could push the date to the August 1 window 'if the deal specifics do not suit us'.
India has repeatedly said that there can be no compromise in a trade deal when it comes to its national interest.
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'India does not negotiate under deadlines. We negotiate keeping national interest in mind, and national interest is paramount in all our engagements across the world,' Goyal said on Saturday.
'After the Modi government came to power, we have signed free trade agreements with Mauritius, the United Arab Emirates, Australia, and the four-nation EFTA (European Free Trade Association) grouping—Switzerland, Norway, Iceland, and Liechtenstein—and now with the UK last month.'
'Today, India negotiates from a position of strength. We are self-confident and can compete with anybody in the world. This is not the weak India under Congress and the UPA, which signed agreements that were not in the national interest,' he claimed.
Goyal on Friday said Free Trade Agreements are possible only when both sides benefit and involve a win-win.
'National interest should always be supreme. Keeping that in mind, if a deal is made, then India is always ready to deal with developed countries,' he said.
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Hindustan Times quoted Mark Linscott, a former assistant US trade representative for South Asia, as saying that an agreement in principle has likely been reached.
Linscott, who is currently a senior adviser at the Asia Group, said 'I think they basically sewed up what is likely to be an agreement in principle but not a legally binding agreement, in which the two sides issue a statement highlighting what is what has been agreed so far. I think then there will be continuing negotiations on the specifics for a legally binding agreement, and that's likely to be in the next few weeks.'
Linscott said he was 'very hopeful' and praised both Modi and Trump.
'I think it will be a huge feather in the cap for both President Trump and Prime Minister Modi to do this, and we've got a bigger negotiation to come. This isn't the end of negotiations, it's just the start, right, and seemingly a successful start to the negotiation.'
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Union Minister Piyush Goyal on Friday said Free Trade Agreements are possible only when both sides benefit and involve a win-win. PTI
Still, some are cautioning against moving too quickly to sign a trade deal with America.
'Trump's model isn't a free trade agreement, it's a YATRA - Y ielding to American Tariff Retaliation Agreement,' the Global Trade Research Initiative (GTRI) founder Ajay Srivastava has said.
'With the clock ticking, India is seen as a top candidate for a deal announcement in the coming days…But New Delhi must tread carefully', he added.
Though the Trump administration promised to sign '90 deals in 90 days', that hasn't happened.
Instead, Trump has signed a 'mini-trade deal' with the UK, a face-saving deal with China that buys some time and a deal with Vietnam.
Trump desperately needs a deal with India to give him a win.
Polls showed that his 'big beautiful bill' – which he recently signed into law – was wildly unpopular with the public.
Trump's personal approval ratings are also tanking.
What about the tariffs on other Asian nations?
Trump has sent letters to the following nations – Japan, South Korea, Kazakhstan, Malaysia, Tunisia, South Africa, Bosnia and Herzegovina, Indonesia, Bangladesh, Serbia, Cambodia, Thailand, Laos, and Myanmar.
However, some countries that lean heavily on China have been targeted including a half a dozen members of Association of Southeast Asian Nations.
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President Donald Trump with President Xi Jinping. File image/ Reuters
This is the second time Trump has extended the deadline – leading some to revive the Taco (Trump always chickens out) moniker which previously angered Trump.
Japan, South Korea, Thailand and Indonesia have massive trade imbalances with the United States .
China allies Cambodia, Myanmar and Laos
Monday's letter to the country that hosts many Chinese owned factories, reduces this rate to 36 per cent.
Prime Minister Hun Manet assured the White House of Cambodia's 'good faith', with reduced tariffs on 19 categories of US products.
Trump also targeted Myanmar and Laos with 40 per cent tolls.
Both nations rely heavily on capital influx from China and their supply chains are closely intertwined with Asia's largest economy.
Washington has repeatedly highlighted the risk of Chinese products passing through Southeast Asian countries to avoid US tariffs targeting China – a process known as 'trans-shipping'.
South Korea
South Korea, already burdened by levies on steel and automobiles, is facing a 25 per cent tariff hike on its remaining exports to the United States, but is cautiously optimistic for a deal.
Washington 'hoped the two sides could reach an agreement before then (August 1)', South Korea's national security adviser Wi Sung-lac said after meeting US Secretary of State Marco Rubio on Monday.
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South Korea, one of the world's biggest shipbuilders, agreed to 'coordinate closely' with the United States to achieve 'tangible and mutually beneficial outcomes', he said.
Japan
A close US ally and its biggest investor, Japan has to deal with a 25 per cent levy on its key auto industry.
It is facing similar tolls on other goods, up from 24 per cent announced in April, but better than the '30 per cent, 35 per cent or whatever the number is that we determine' threatened by Trump last week.
Prime Minister Shigeru Ishiba told a cabinet meeting Tuesday that the tariff set out in the letter was 'genuinely regrettable', local media reported.
The reason for not making a deal, he said, was 'the Japanese government has avoided making easy compromises, firmly demanding what should be demanded, protecting what should be protected, and has conducted rigorous negotiations'.
Trump has criticised Japan for not opening its market enough to US rice and vehicles.
Japan, an ally of the United States was one of the first countries to open negotiations with Trump on a possible trade deal.
The Japanese government says it is defending local farmers' interests and has taken a hardline approach to talks.
'We have no intention of negotiating at the expense of agriculture,' Japan's tariffs envoy Ryosei Akazawa said Tuesday.
Indonesia
Indonesia, facing 32 per cent tariffs, said Tuesday it was optimistic of striking a deal as chief economic minister Airlangga Hartarto headed to the United States to resume talks.
With several weeks breathing room, Jakarta was 'very optimistic about the negotiation', presidential spokesman Hasan Nasbi said.
Indonesia plans to increase its agricultural and energy imports from the United States to finalise an agreement, Airlangga recently told AFP.
Indonesia already announced Monday it had agreed to import at least one million tons of US wheat annually for the next five years, worth $1.25 billion.
Thailand and Malaysia
Thailand was told it faces 36 per cent levies. Bangkok is offering more access to its market for US agricultural and industrial products, increasing its energy purchases, and boosting orders for Boeing airplanes.
Acting prime minister Phumtham Wechayachai told reporters Tuesday he wanted a 'better deal', adding that 'the most important thing is that we maintain good relations with the US'.
Thailand's Acting Prime Minister Phumtham Wechayachai. AFP
Bangkok aims to reduce its US trade surplus by 70 per cent within five years, achieving balance in seven to eight years, Finance Minister Pichai Chunhavajira recently told Bloomberg News.
Thai Airways could commit to purchasing up to 80 Boeing planes in the coming years, according to Bloomberg.
Malaysia faces a 25 per cent tariff and the trade ministry said Tuesday it would continue negotiations to reach a 'balanced, mutually beneficial, and comprehensive trade agreement'.
Bangladesh and other nations
The world's second-largest textile manufacturer is facing a 35 per cent tariff on its goods but was hoping to sign an agreement by early July.
Textile and garment production accounts for about 80 per cent of Bangladesh's exports, and supplies US brands including Vans, Timberland and The North Face.
Dhaka has proposed to buy Boeing planes and boost imports of US wheat, cotton and oil.
Muhammad Yunus, chief adviser of Bangladesh's interim government. AFP
'We have finalised the terms,' Commerce Ministry Secretary Mahbubur Rahman said, adding that negotiators were set to meet Tuesday.
Kazakhstan (25 per cent), South Africa (30 per cent), Tunisia (25 per cent), Serbia (35 per cent), and Bosnia (30 per cent) are among the other targets of the letters made public by Trump on Monday.
Indian Express quoted GTRI as warning that any such deals made by Trump do not measure up to WTO norms for Free Trade Agreements (FTAs).
'Under the Trump model, only the partner country lowers its MFN tariffs, while the US makes no reciprocal cuts. Trump lacks Fast Track Trade Authority from Congress to reduce MFN tariffs. Instead, he is offering to roll back only the 'Liberation Day' tariffs imposed in April under emergency powers — tariffs that a US federal court has already ruled unlawful. The case is under appeal, but the legal basis remains fragile,' GTRI said.
With inputs from agencies