Hassett, responding to a question on India facing an additional charge for its purchase of Russian oil, said Trump and US Trade Representative Jamieson Greer will have more information on that “shortly”.
On the 25 per cent tariff on India, Hassett added that “what’s going to happen is that India is going to cut their prices to the US in order to maintain their market share”.
“That’s what everybody else has been doing, and then they might reconsider their practices, which have led to this higher rate. And over time, I would guess the Indian firms will be onshoring production in the US, and Indians might even open their markets more to us, so that we reconsider a future trade deal,” he said.
On the tariff, Partner at The Asia Group Nisha Biswal said in a statement that the US is using “hardball tactics” when there is an ambitious deal already on the table.
“There were many reasons why the final deal seems to have faltered. One, President Trump wanted to retain a minimum 20 per cent baseline tariff on India; this was a non-starter for New Delhi,” she said.
Biswal, who was Assistant Secretary for South and Central Asian Affairs at the Department of State from 2013 to 2017, added that Trump wanted US agricultural and dairy exports to India and New Delhi has gone as far as it can for now given domestic sensitivities.
Trump also wanted to directly negotiate with Prime Minister Narendra Modi since he felt that the deal did not go far enough, while New Delhi thought it had an expansive deal with the US Trade Representative and “didn’t want Trump to reopen or renegotiate terms like Vietnam”, she said.
“Trump is now exerting maximum pressure on India to get Modi’s attention. Modi may want to examine what Japan, the EU and China did, all of whom have faced Trump’s ire. Keep cool, retaliate if you must, but keep the channel open,” Biswal said.
“Trump wants more than what his negotiators got, and India needs to be ready with what it will give him. While he is throwing everyone in the mix—defence, Russian oil etc. – he is looking for a deal and this is how he negotiates, friend or foe. The real tragedy would be if both sides walk away from a big win. And the implications for US businesses and India’s economy could be quite severe,” she added.
