US wants trade deal with India to put pressure on China

The United States and India could sign a limited trade deal at the end of this month, sources told Reuters. The two countries’ leaders showed up together on Sunday at the ‘Howdy, Modi’ event in Houston, Texas.

According to the sources, the deal under discussion with India would lower some tariffs on US produce and restore preferential treatment for some Indian exports to the United States.

“There’s a push to get something done with India, with an eye for UNGA,” said a Washington-based source familiar with the discussions.

A deal between Washington and New Delhi would come amid Trump’s protracted trade war with China. The US president is also expected to sign a deal with Japanese Prime Minister Shinzo Abe this week that will lower Japanese farm tariffs.

Trump has demanded better terms of trade from most of the top commercial partners of the United States, blaming previous deals for the loss of millions of US manufacturing jobs.

He has repeatedly complained about India’s “unacceptable” high tariff rates, describing the country as the “king” of tariffs.

India increased tariffs on 28 American products in June, after the Trump administration had withdrawn the country’s special trade privileges. The withdrawal affected more than $5 billion worth exports from India to the United States.

India mostly exports gems, pharmaceuticals, machinery, mineral fuels, and vehicles to the US. The duty on US walnuts skyrocketed to 120 percent, while duties on chickpeas and some types of lentils were raised to 70 percent.

Despite the tariff hikes, trade between the two countries has been growing and reached $142.1 billion last year. According to official US statistics, India had a trade surplus of $24.2 billion.

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