Trump Optimistic on India Trade Deal, Less So on Japan

President Donald Trump has expressed optimism about a potential trade agreement with India, suggesting a deal could be reached soon. He believes such an agreement would benefit American businesses by increasing their access to the Indian market and reducing existing tariffs. However, he expressed less confidence in the possibility of a similar deal with Japan.

During a conversation with reporters aboard Air Force One, Trump indicated that India might soon lower its trade barriers. If this occurs, the U.S. would refrain from imposing the 26 percent tariffs that were announced in April and temporarily suspended until July 9. Trump noted that India currently restricts foreign access but expressed hope for a change, which would pave the way for a deal with significantly reduced tariffs.

U.S. Treasury Secretary Scott Bessent also indicated that the U.S. and India are close to finalizing a deal. This agreement is expected to lower tariffs on American goods entering India and prevent India from facing new tariffs that could be implemented next week. Indian officials remained in Washington through June 30 to continue negotiations. According to Indian government sources, both countries are actively working towards a trade agreement to resolve outstanding issues.

A White House official stated that the Trump administration is prioritizing a deal with India over one with Japan, particularly before the July 9 deadline. After this date, the 90-day pause on tariff increases ends, and India could face a new 27 percent tariff, up from the current 10 percent.

Negotiations between India and the U.S. have faced challenges, particularly concerning tariffs on car parts, steel, and agricultural products. Indian Foreign Minister Subrahmanyam Jaishankar stated that the talks are "hopefully more than halfway" complete and that both sides will need to compromise.

In contrast, Trump expressed a more negative view of the situation with Japan. He stated that a deal with Japan by the deadline was unlikely. Trump criticized Japan for not purchasing rice from the U.S., despite selling a large number of cars in the American market. He warned that if Japan does not meet U.S. demands, tariffs as high as 30 percent or 35 percent could be imposed on Japanese imports, exceeding the previously announced 24 percent tariff, which was also paused until July 9.

Trump stated that he would send a letter to Japan, acknowledging their inability to meet U.S. requirements and informing them of the potential for tariffs.

So far, only Britain has reached a limited trade agreement with the U.S., involving a 10 percent tariff on goods like cars in exchange for improved access for aircraft engines and beef.