A day after indicating that a “lot of countries” might be given breaks on reciprocal tariffs, US president Donald Trump on Tuesday said he would rather limit the exceptions.
“I know there are some exceptions, and it’s an ongoing discussion, but not too many, not too many exceptions. No, I don’t want to have too many exceptions,” Trump told news outlet Newsmax.
The latest statement by Trump has kept New Delhi on tenterhooks, given that extra levies on exports to the US, its largest overseas market for goods, could have serious implications of significant sections of domestic industry. The US tariffs are to take effect from April 2.
Meanwhile, India and the US are hurrying to decide on the framework of a bilateral trade agreement (BTA), and expectations are that a deal could be struck rather soon.
A high-level U team led by assistant trade representative for South and Central Asia Brendan Lynch is here to decide on the contours of the agreement.
A senior government functionary said here on Wednesday that the Indian Industry is “paranoid” about reciprocal tariffs and has asked the government to conclude the BTA at the earliest. Stating that talks on BTA “are progressing well,” the person said the contours of the agreement and negotiation schedule may be finalised “in the next three days.”
The industry is worried that if reciprocal tariffs are imposed a lot of Jobs will be at stake and asked for either deferment or protection from the tariffs, the source said. “Everyone is writing to the government to protect them from the possible impact of reciprocal tariffs.”
India among other countries have sought carveouts ahead from the reciprocal tariffs. Earlier this week, the government announced scrapping of a 6% levy on online advertisement, completing the eliminatio of the “Google tax” on firms accessing Indian markets with digital means. This is seen as big positive for Big Tech, which is aggressive on the thriving Indian markets.
Reports suggest that India is open to cutting tariffs on more than half of US imports worth $23 billion in the first phase of a trade deal. “In an internal analysis, New Delhi estimated such reciprocal tariffs would hit 87% of its total exports to the United States worth $66 billion, Reuters had reported citing unnamed government sources.
The US ran a goods trade deficit of $45.7 billion in 2024, up 5.4% over 2023. While many experts say that zero-for-zero tariff arrangement with the US covering a broad spectrum of tariff lines might not hit India on an aggregate basis, if certain sensitive sectors live livestock are kept out of the BTA, others differ and note that imports from the US could directly threaten sales of domestic agriculture products in urban rather than rural areas, leaving Indian farmers in the lurch.
While most commentators are uncertain whether India will be among countries that will get an exemption from reciprocal tariffs, Global Trade Research Initiative’s Ajay Srivastava says concessions for India are highly unlikely given Trump’s portrayal as a “high tariff” country. “Any exemption will come at a steep cost and the US will demand far reaching concessions from India in sectors far from trade,” he said.
The latest round of India-US talks follows the visit of commerce and industry Minister Piyush Goyal to the US a fortnight back to discuss trade-related issues. Both sides are aiming to conclude the BTA by end of this year and in the first tranhce, liberalisation of trade on goods will be given priority.
India is the only country besides the UK that has been offered a trade deal by the US to avoid a showdown on tariffs. After a very public spat on tariffs and counter tariffs after the US imposed higher duties on steel and aluminium, the European Union has also fallen in line and is now looking at some kind of an agreement with the US.
The EU trade commissioner Maros Sefcovic is in Washington for talks with US trade officials to avoid reciprocal tariffs that are a few days away. “The EU’s priority is a fair, balanced deal instead of unjustified tariffs,” he said in a post on ‘X’. After announcing tariffs on each other the US and Canada have also agreed to new trade talks. The 25% tariffs on Canada and Mexico have been put on hold April 2.
Trump has promised a sweeping tariff announcement next Wednesday, touting it as a “Liberation Day” against trading partners he has long accused of “ripping off” the US. The date is to be headlined by reciprocal levies for countries that impose their own tariffs on US goods, though the exact size, scope and method of those tariffs haven’t yet been disclosed.
Trump has previously said his reciprocal tariffs will be weighted to offset other countries’ non-tariff barriers as well. Yet the president has also said in recent days that his upcoming moves won’t be an exact tit-for-tat response, and he may give certain countries exemptions or reductions.
Trump said Monday at the White House that he “may give a lot of countries breaks.” His back-and-forth comments on his tariff plans have sown confusion among investors and businesses.
The suggestion of exemptions has sent countries rushing to offer concessions and play up their trade relationships with the US. “I’ll probably be more lenient than reciprocal, because if I was reciprocal, that would be very tough for people,” Trump reiterated.
(with Bloomberg inputs)