US President Donald Trump has signalled he is open to negotiating tariffs, if other nations offer something “phenomenal” in return.
Trump, on April 2, announced a minimum tariff of 10 per cent on imports in US, with the tax rate running much higher on certain products from countries like India, China and those from the European Union.
Speaking aboard Air Force One Thursday, Trump made it clear that tariffs are not just about protectionism but a strategic bargaining tool in trade talks.
“If somebody said that we’re going to give you something that’s so phenomenal, as long as they’re giving us something that’s good,” Trump said, hinting at potential trade-offs.
Also Read: India must leverage US President’s tariff flexibility clause
India, too, has been slapped with a 26 tariff rate, leaving sectors like jewellery and autos rattling. Meanwhile, New Delhi vows to study the "new opportunities" that may arise from Trump's Liberation Day move.
The US President also left the door open for possible renegotiation, and said, “The tariffs give us great power to negotiate. Every country has called us.”
“The rest of the world wants to see is there any way they can make a deal," he said.
How can India negotiate?
For India, a unique opportunity presents itself to navigate Donald Trump's tariff policies through the 'Modification Authority' clause. This allows the US President to reduce tariffs if a country takes significant steps to improve its trade arrangements.
India is already in advanced negotiations for a bilateral trade deal with the Trump Administration, positioning it as a frontrunner in discussions compared to other nations.
Also Read: Warning! India and US could both pay for Trump’s tariff strike
For Trump, this clause serves as a crucial bargaining tool, enabling him to raise tariffs if retaliatory measures are taken by trading partners, while also allowing for tariff reductions if countries align more closely with US economic and security interests. Israel, which has faced similar tariffs but has cooperated with the US, is seen as a potential beneficiary of this clause.
India's trade deal could lead to favorable modifications in tariffs, especially given the strategic alignment in national security and technology sectors between the two countries
Impact already seen on 'tariff-ied' countries
The fallout has already hit global markets. Indian pharmaceutical stocks tumbled on Friday amid broader sell-offs across Asia. In the US and Europe, stock index futures dipped, the dollar weakened, and the 10-year US Treasury yield dropped below 4% as investors braced for potential economic shocks.
The turmoil follows a brutal session on Wall Street, where the S&P 500 plunged nearly 5%, erasing $2.5 trillion in market value—the worst day since the COVID-19 pandemic.
The Russell 2000 index, tracking smaller companies, extended its decline to 20% from its 2021 high, raising fears that Trump’s tariff war could strain the US economy.
(With inputs from Agencies)
Trump, on April 2, announced a minimum tariff of 10 per cent on imports in US, with the tax rate running much higher on certain products from countries like India, China and those from the European Union.
Speaking aboard Air Force One Thursday, Trump made it clear that tariffs are not just about protectionism but a strategic bargaining tool in trade talks.
“If somebody said that we’re going to give you something that’s so phenomenal, as long as they’re giving us something that’s good,” Trump said, hinting at potential trade-offs.
Also Read: India must leverage US President’s tariff flexibility clause
India, too, has been slapped with a 26 tariff rate, leaving sectors like jewellery and autos rattling. Meanwhile, New Delhi vows to study the "new opportunities" that may arise from Trump's Liberation Day move.
The US President also left the door open for possible renegotiation, and said, “The tariffs give us great power to negotiate. Every country has called us.”
“The rest of the world wants to see is there any way they can make a deal," he said.
How can India negotiate?
For India, a unique opportunity presents itself to navigate Donald Trump's tariff policies through the 'Modification Authority' clause. This allows the US President to reduce tariffs if a country takes significant steps to improve its trade arrangements.
India is already in advanced negotiations for a bilateral trade deal with the Trump Administration, positioning it as a frontrunner in discussions compared to other nations.
Also Read: Warning! India and US could both pay for Trump’s tariff strike
For Trump, this clause serves as a crucial bargaining tool, enabling him to raise tariffs if retaliatory measures are taken by trading partners, while also allowing for tariff reductions if countries align more closely with US economic and security interests. Israel, which has faced similar tariffs but has cooperated with the US, is seen as a potential beneficiary of this clause.
India's trade deal could lead to favorable modifications in tariffs, especially given the strategic alignment in national security and technology sectors between the two countries
Impact already seen on 'tariff-ied' countries
The fallout has already hit global markets. Indian pharmaceutical stocks tumbled on Friday amid broader sell-offs across Asia. In the US and Europe, stock index futures dipped, the dollar weakened, and the 10-year US Treasury yield dropped below 4% as investors braced for potential economic shocks.
The turmoil follows a brutal session on Wall Street, where the S&P 500 plunged nearly 5%, erasing $2.5 trillion in market value—the worst day since the COVID-19 pandemic.
The Russell 2000 index, tracking smaller companies, extended its decline to 20% from its 2021 high, raising fears that Trump’s tariff war could strain the US economy.
(With inputs from Agencies)
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