US eyes trade pact with India amid tariff talks; Japan deal uncertain

US President Donald Trump has expressed optimism over securing a trade deal with India, saying it could result in significantly lower tariffs and better access for American firms, AFP reported. 

Speaking to reporters on Air Force One, Trump suggested India may finally ease trade restrictions, potentially helping both sides avoid the 26% tariff set to come into force on 9 July.

He remarked, “Right now, India doesn’t accept anybody in. I think India is going to do that, if they do that, we’re going to have a deal for less, much less tariffs.”

However, Trump voiced scepticism over the progress of a separate agreement with Japan. US Treasury Secretary Scott Bessent earlier confirmed that negotiations with India were advancing, with both nations aiming to reduce import duties and prevent the imposition of sharp new levies next week.

“We are very close with India,” Bessent told Fox News in response to a question about progress on trade negotiations.

Indian officials extended a visit to Washington last week through Monday to try to reach an agreement on a trade deal with President Donald Trump’s administration and address lingering concerns on both sides, Indian government sources told Reuters.

A White House official familiar with the talks said the Trump administration plans to prioritise securing trade deals with countries including India ahead of Japan in the days leading up to the July 9 deadline.

India is one of more than a dozen countries actively negotiating with the Trump administration to try to avoid a steep spike in tariff rates on July 9, when a 90-day tariff pause ends. India could see its new “reciprocal” tariff rate rise to 27% from the current 10%.

The US-India talks have hit roadblocks over disagreements on import duties for auto components, steel, and farm goods, ahead of Trump’s deadline to impose reciprocal tariffs.

“We are in the middle — hopefully more than the middle — of a very intricate trade negotiation,” Indian Foreign Minister Subrahmanyam Jaishankar told an event in New York on Monday.

“Obviously, my hope would be that we bring it to a successful conclusion. I cannot guarantee it, because there’s another party to that discussion,” said Jaishankar, who is in the US for a meeting of the China-focused Quad grouping.

He added that there “will have to be give and take” and the two sides will have to find middle ground.

Trump suggests higher tariff for Japan

Bessent told Fox News that different countries have different agendas for trade deals, including Japan, which Trump complained about on Monday and again on Tuesday.

Trump said he was not thinking of extending the July 9 deadline and would simply send letters notifying countries of the tariff rate they would face.

“We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it,” Trump told reporters aboard Air Force One as he returned to Washington from a trip to Florida.

Trump suggested he could impose a tariff of 30% or 35% on imports from Japan, well above the 24% tariff rate he announced on April 2 and then paused until July 9.

He said Japan was refusing to accept US-grown rice, a demand made by Washington that he described as “an easy one,” while selling millions of cars in the United States.

“So what I’m going to do, is I’ll write them a letter saying we thank you very much, and we know you can’t do the kind of things that we need, and therefore you pay a 30%, 35% or whatever the numbers that we determine,” he said. 

So far, only Britain has negotiated a limited trade deal with the Trump administration, accepting a 10% US tariff on many goods, including autos, in exchange for special access for aircraft engines and British beef.