India-US trade deal: Is Trump's 'big deal' claim a pressure tactic? Experts weigh in

India Today

US President Donald Trump on Thursday announced a trade deal with China on rare earths and hinted at a 'very big' trade agreement with India.

Transcript

00:00So let's take those big questions.

00:02Will India-U.S. strike this trade deal now?

00:05Is that the big carrot that United States has offered India?

00:10Which sectors can India open up?

00:13What is this deal really going to mean for the Indian economy?

00:18What will India get in return if the United States wants greater market access?

00:24Is Donald Trump's declaration that he's made today that a big deal is in the offing

00:28simply another pressure tactic by a president who sometimes seems to be more of a dealmaker?

00:34Joining me now, Meera Shankar, former Indian ambassador to the United States,

00:38and Raymond Vickery, author and advisor on U.S.-India relations,

00:41the former U.S. Assistant Secretary of Commerce and Trade.

00:44So knows a thing or two about trade.

00:47Let me come to you there in the United States, Mr. Vickery, first.

00:50What's the sense you're getting?

00:52Is Donald Trump building pressure on India to sign up,

00:55saying that I've already done a deal with China, next India?

00:59Or do you believe that this will, in its logical course,

01:02actually happen as early as July or possibly as late as August?

01:08Well, thanks very much for having me.

01:10You know, this is of a piece of the way in which President Trump likes to operate.

01:16And that is, he destroys international multi-level approaches,

01:23the World Trade Organization before that to general agreements and tariffs and trade.

01:28So he complies himself as the great man making a bilateral deal.

01:34And then what he does is create a problem which really wasn't there before,

01:39or at least not in the way in which he made it so acute on April 2nd

01:45by announcing these atrocious tariffs across the board.

01:50And then he claims to have solved them.

01:54I think there will be an announcement of an agreement,

01:58but the agreement is going to be like that,

02:01which was previously signed with the U.K.

02:04and is in the offing for China.

02:08And that is really, it's a framework.

02:10It addresses a couple of issues,

02:14but really it is not at all the blockbuster,

02:18which he says and is not going to do the things that he talks about,

02:24about bringing manufacturing back to the U.S. and so forth.

02:27I think that there will be some progress,

02:30but basically this president looks at trade deficits.

02:36And so he'll get something in terms of greater defense purchases,

02:42greater oil purchases,

02:44claim that that has brought down the trade deficit

02:47when it really has nothing to do with tariffs.

02:51So I think that's the kind of agreement you're going to see.

02:54And that's what you've seen so far with China.

02:57Basically, this agreement signed with China is just simply to have a truce

03:03on the 145% tariff, which he had announced earlier.

03:08So I think we'll see more of the same.

03:11Meera Shankar, you're hearing from Raymond Vickery there,

03:14saying that there'll be a lot of optics around whatever Donald Trump does,

03:18but the reality, the nitty-gritty of a sort of wide-ranging trade deal

03:23is unlikely given the fact that there are a number of sticking points

03:27on critical issues,

03:29market access being one of them,

03:31agriculture products being another.

03:33So it could be at best a limited trade deal.

03:36It could bring some rationality to tariffs,

03:39but it's not really going to be the game changer

03:42that Donald Trump made it out to be today

03:44when he said a big deal with India is in the offing.

03:47Do you agree?

03:50Yes.

03:53Meera Shankar, can you hear me?

03:59Okay, that line has frozen.

04:01Raymond, go ahead with that.

04:03Am I right in saying, to pick what you're saying,

04:06that with Donald Trump, it's not about big-ticket optics,

04:10but a very limited trade deal

04:12that he will make a lot of noise about?

04:15Well, I think you've capsulated it very well.

04:18You know, Wall Street has already adopted

04:21the acronym TACO for Donald Trump

04:25in regard to trade and tariffs.

04:28And that stands for Trump always chickens out.

04:32And what happens is he announces something

04:36like he did on April 2nd,

04:39which would have been a horrendous tariff on India.

04:43And he sees markets go down and then he backs off

04:49and then he claims a victory for it.

04:52So I think that is of a piece

04:55and that's what's going to happen here.

04:59I hope that I'm wrong, quite frankly,

05:01because I want to see free trade

05:03between the United States and India,

05:05or at least freer trade.

05:07And we could get that

05:10if we had a more rational and logical approach

05:13to the problem.

05:15Let me bring in Meera Shankar,

05:17who we had lost for a moment.

05:18Meera Shankar, what's your sense?

05:19Raymond Vickery is saying

05:20this could be at best a very limited deal.

05:24Do you believe a wide-ranging deal

05:26is possible with the United States,

05:27given that there are several tricky issues,

05:30agriculture, market access?

05:32I think the challenge for India

05:35is to ensure that whatever trade deal

05:40is worked out with the United States,

05:43A, does not impact adversely

05:47sensitive sectors in India,

05:50such as agriculture,

05:52where we have subsistence farming,

05:55which cannot compete

05:56with the huge mega corporations

05:59which operate in the US.

06:02Secondly, that there are some benefits

06:05which flow to India

06:07beyond just staving off the tariffs

06:11which Trump has threatened to impose.

06:15See, at the moment,

06:16it appears that the US

06:18does not have negotiating,

06:20fast-track negotiating authority

06:24from the Congress

06:25to really reduce tariffs

06:28beyond the MFN,

06:30which they have offered under the WTO.

06:33So, I don't know what India

06:36is going to get from this.

06:38So, what happens, ma'am,

06:40to the tariffs that Trump announced

06:43unilaterally in April,

06:44then put a pause button on them,

06:46saying, I'm pausing it to July 9th?

06:48You believe that even if there's a trade deal,

06:50some of those tariffs will continue

06:52and carry forward?

06:54Some will continue,

06:56like the tariffs on steel and aluminium,

06:58which have already been put in place

07:00and raised to 50%,

07:03and derivative products

07:05made of steel and aluminium

07:07have also been imposed

07:10the same kind of tariffs, 50%.

07:12Similarly, automobiles

07:14and automobile components,

07:17those tariffs will continue,

07:19but the threatened 26%

07:22reciprocal tariff

07:23will probably be withheld

07:26if there is a deal.

07:28If talks are progressing well,

07:31but no deal,

07:32you know, the deal still requires

07:35some work to be finished,

07:37I am not sure

07:38whether the reciprocal tariffs

07:41will kick in

07:42or be suspended

07:43as some are speculating

07:46that all the reciprocal tariffs

07:49may be extended

07:50for some more time

07:52because deals with the EU,

07:55with Vietnam,

07:57with Japan

07:58are still to be finalised.

08:01They have not yet reached a point

08:03where they are final.

08:06So it could be

08:07that he rolls over

08:08the temporary suspension

08:10for some time.

08:11Do you believe,

08:13Raymond Vickery,

08:14that's what could happen,

08:15that having dramatically announced

08:17a slew of tariffs

08:18at the start of April,

08:21then put a pause button on them,

08:23do you believe that,

08:24at best,

08:25Trump will withhold them

08:26as long as the trade negotiations

08:29are on track

08:30or he's separating trade

08:33from tariffs?

08:34He wants America's

08:36trade deficits

08:37to reduce

08:38with countries

08:38like India

08:39and China.

08:40Tariffs will be used

08:42as a weapon.

08:44Well, I think Ambassador Shankar

08:46is right.

08:47This is not going

08:48to be

08:49an imposition

08:54of great tariffs

08:56or it's not going

08:58to be

08:58a great opening.

09:02Trump,

09:03President Trump,

09:04has shown

09:05in his track record

09:07that when push

09:08comes to shove,

09:10he backs off

09:12in order to be able

09:14to claim a victory.

09:16To hear him tell it

09:17when it finally

09:19comes out,

09:21whether it's

09:22the 9th of July

09:24or probably

09:25even later than that,

09:27it's going to be

09:29the sort of

09:30damp squib

09:31that has been

09:33the case

09:34in regard

09:36to China

09:37and UK

09:39so far.

09:40So this is

09:41all of a piece

09:42to try

09:43to build

09:44an authoritarian

09:46approach

09:48not only

09:50domestically

09:51in the United States

09:52but

09:53internationally.

09:56I think

09:57that there will be

09:57some placation

09:58of him.

09:59NATO meeting

10:01recently showed

10:02before that

10:04with the UK

10:05that

10:05you deal

10:07with

10:08President Trump

10:09by

10:10placation

10:11rather than

10:13confrontation

10:14and then

10:15things go along

10:17pretty much

10:18as they have.

10:20That's

10:21not the way

10:22in which

10:22the international

10:23system ought to

10:24run and it's

10:25not the way

10:25in which

10:26US-India

10:27trade relations

10:28ought to run

10:29because these

10:30are the two

10:30great democracies

10:31of the world

10:32and trade

10:34and economic

10:35engagement

10:35is very much

10:36a part of it

10:37but it's not

10:38going to be

10:38accomplished

10:39by Trump

10:40threats

10:40and then

10:41claiming victory

10:42for a problem

10:44which he created

10:45in the first place.

10:47You know

10:47Meera Shankar

10:48in conclusion

10:48we've seen

10:49Donald Trump

10:50make these

10:50comments

10:50about how

10:51he stopped

10:52the war

10:52between India

10:53and Pakistan

10:54because he

10:54made it

10:55very clear

10:55issued an

10:56ultimatum

10:56if you don't

10:57stop the war

10:58no trade deal

10:59again

10:59many believe

11:00that is

11:00Trump simply

11:01once again

11:01trying to

11:02claim credit

11:03and be at

11:03the center

11:04of anything

11:04that happens

11:05do you believe

11:06that Trump

11:06is holding

11:07out a carrot

11:08to India

11:08and is it

11:09really going

11:10to make

11:10any significant

11:11difference

11:12having this

11:12trade deal

11:13with the

11:13United States

11:14I think

11:15it's not

11:16a carrot

11:16at all

11:17it is

11:18the removal

11:19of a stick

11:20because

11:21there's no

11:22significant

11:23concession

11:24which is

11:25being offered

11:25to India

11:26as far

11:27as I have

11:28seen

11:28from news

11:29because

11:31you know

11:32MFN

11:32is the

11:33normal

11:34tariff

11:34the 10%

11:36baseline

11:37tariff

11:38will still

11:38apply

11:39the steel

11:40and aluminium

11:41tariffs

11:41will still

11:42apply

11:42the tariffs

11:44on automobiles

11:45automobile

11:46components

11:47will still

11:47apply

11:48and India

11:50will reduce

11:51tariffs

11:52for the

11:52United States

11:53so what

11:54Trump is

11:55seeking

11:55is he's

11:57holding out

11:58a big

11:58stick

11:59then he

11:59says I

12:00won't use

12:01the stick

12:01if you

12:02open up

12:03so that's

12:04the essence

12:04of the

12:05trade

12:05negotiation

12:06so I

12:06don't see

12:07that there's

12:08any carrot

12:08for India

12:10but what

12:11it does

12:11is to

12:12say okay

12:12it will

12:13stave off

12:14trade

12:15action

12:16that Trump

12:17threatens

12:17okay

12:18very very

12:19interesting

12:20there

12:20Meera Shankar

12:21Raymond

12:21Vikri

12:22joining me

12:22on that

12:23story

12:23with Donald

12:23Trump

12:24you've

12:24always

12:25got to

12:25look

12:25beyond

12:26the

12:26headlines

12:26and not

12:27the

12:27one-liners

12:28that he

12:29tends to

12:29throw

12:30to his

12:30audiences

12:31thank you

12:31both very

12:31much

12:32for joining

12:32me here

12:33at the

12:33top of

12:34the news

12:34tonight

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