The United States is on the verge of finalizing a significant trade agreement with India, signaling a strategic pivot away from China. Treasury Secretary Scott Bessent announced that negotiations with India are “very close” to completion, highlighting India’s transparent tariff structures as a facilitating factor in the discussions.
This development comes amid the Trump administration’s implementation of “Liberation Day” tariffs, which impose a 10% baseline tariff on imports, with the potential to escalate to 26% for countries without trade agreements . India’s willingness to engage in negotiations has positioned it favorably, contrasting with China’s stalled discussions and retaliatory tariffs of up to 125% on U.S. goods.
Vice President JD Vance recently met with Indian Prime Minister Narendra Modi, resulting in the establishment of a “terms of reference” for the trade agreement. This framework aims to solidify the economic partnership between the two nations and avoid the imposition of higher tariffs.
In addition to India, the U.S. is making progress in trade talks with South Korea and Japan. Bessent noted that these countries are eager to finalize agreements ahead of their upcoming elections, viewing successful negotiations as beneficial for their domestic political landscapes.
Conversely, discussions with China remain at an impasse. Bessent emphasized that the responsibility lies with Beijing to de-escalate tensions and reduce tariffs, warning that the current trade imbalance is unsustainable for China.
The Trump administration’s approach underscores a commitment to reshaping global trade dynamics, prioritizing partnerships with nations willing to engage in equitable agreements while holding others accountable for unfair practices.
