As India awaits an announcement on an interim commerce take care of the US, Commerce Secretary Howard Lutnick on Sunday mentioned that August 1 is a tough deadline for nations to start paying tariffs, though the US will proceed to interact with them afterwards.
This comes after India and the US concluded a week-long spherical of commerce negotiations aimed toward finalising an interim commerce deal, seen as essential for India to keep away from reciprocal tariffs and achieve an edge over its Asian friends.
“That’s a tough deadline, so on August 1, the brand new tariff charges will are available… Nothing stops nations from speaking to us after August 1, however they’re going to start out paying the tariffs on August 1,” Lutnick mentioned in a tv interview on Sunday.
Notably, President Donald Trump’s deadline for reciprocal tariffs has shifted from April 2 to July 9, and now to August 1. Whereas Trump has reiterated {that a} take care of India is shut, India might face tariffs of as much as 26 per cent if each nations fail to achieve an settlement.
Authorities officers have maintained that India is aiming to signal a bilateral commerce settlement (BTA) by the top of the 12 months, which would supply market entry in labour-intensive sectors and guarantee a big tariff differential in comparison with its Asian friends.
Lutnick additional acknowledged that smaller nations — together with these in Latin America, the Caribbean, and plenty of in Africa — would face a baseline tariff of 10 per cent. “The larger economies will both open themselves up or they’ll pay a good tariff to America,” he mentioned.
In the meantime, commerce consultants have identified that, regardless of being introduced as commerce “agreements,” Trump’s offers don’t meet WTO requirements for Free Commerce Agreements (FTAs). Underneath WTO guidelines, FTAs require mutual tariff reductions on a considerable share of commerce.
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“Underneath the Trump mannequin, solely the accomplice nation lowers its Most-Favoured-Nation (MFN) tariffs, whereas the US makes no reciprocal cuts. Trump lacks Quick Observe Commerce Authority from Congress to cut back MFN tariffs. As a substitute, he’s providing to roll again solely the ‘Liberation Day’ tariffs imposed in April underneath emergency powers — tariffs {that a} US federal courtroom has already dominated illegal. The case is underneath enchantment, however the authorized foundation stays fragile,” the assume tank World Commerce Analysis Initiative (GTRI) mentioned.
For India, these April tariffs added a 26 per cent surcharge on high of regular US tariffs. Even when a deal is struck, Indian exports should still face a minimal 10 per cent extra levy, making it a pressured compromise, not a real partnership, GTRI mentioned in a report.
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