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Inside the US-India trade talks: any breakthrough on aluminium and steel tariffs?

EDITED BY : 4MINS READ

All eyes are now fixed on the trade dialogue between India and the United States that kicked off on June 26. The stakes are high—not for a full-fledged trade deal, but for an interim agreement that could shift the course of escalating tariff tensions. The clock is ticking, as July 9 marks the end of the 90-day suspension period of Donald Trump’s retaliatory 26 per cent aluminium tariffs announced on April 2.

Inside the US-India trade talks: any breakthrough on aluminium and steel tariffs?
Image soure: Council on Foreign Relations

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Over the past three months, both nations have engaged in a flurry of bilateral exchanges to resolve the tariff deadlock, particularly surrounding aluminium and steel. India even took its grievances to the World Trade Organization, challenging Washington's move as blatant protectionism disguised as trade policy. Yet, all efforts seemingly hit a wall when Trump doubled down, raising aluminium and steel tariffs from 25 per cent to a staggering 50 per cent.

Now, with the deadline fast approaching, the interim trade talks carry the weight of a possible breakthrough or another bitter twist in the tariff saga. Will diplomacy win the day, or are we bracing for yet another escalation masked as negotiation? Well, as of now, the interim trade talk has shaped up something like this:

  • 50 per cent tariff on aluminium and steel and 25 per cent duty on automobiles remain in place
  • India has drawn red lines by taking firm stand on crucial sectors including agriculture and dairy.
  • Trump has threatened any BRICS countries (Brazil, Russia, India, China, and South Africa) go against the US trade policies will be charged an additional 10 per cent tariff.
  • India awaits clarity on whether a trade agreement with Washington can be reached before the US President’s tariff deadline.
  • The implementation of reciprocal tariffs will take effect from August 1, 2025.

Also read: India warns of retaliatory tariffs if US doubles aluminium and steel duties

For a moment, it looked like the US-India trade deal was within reach. But just as the negotiations appeared to gain traction, the conversation hit a r roadblock: agriculture. Donald Trump, ever the dealmaker, had his eyes set on exporting American corn and soybean to India. But given the agricultural sector a sensitive area, the Indian government drew a clear red line.

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EDITED BY : 4MINS READ

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