Donald Trump is angling to sign what’s being described as a “limited” trade agreement with India’s Narendra Modi later this month, according to multiple people familiar with the discussions.
The arrangement, if it comes to fruition, would be the second such deal in the space of two months. Earlier this week, the White House re-announced an “initial trade agreement” with Japan, the contours of which were sketched out at the G-7 in August.
The prospective agreement with Modi would be more “truce” than “deal”. India is expected to reduce tariffs on American produce in exchange for the possible restoration of the country’s GSP status, which the US yanked earlier this year.
Read the full story on India’s GSP status
Trump ended the country’s preferential status under the program (which is designed to “provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty”) in late May, although the White House previewed the move months earlier. In mid-June, New Delhi hit back with tariffs on US goods including almonds, walnuts and apples.
As amusing as that latter bit sounds, it wasn’t very funny to America’s apple and almond farmers. The US challenged the levies at the WTO.
According to sources who spoke to Reuters, the latest talks “are focused on US demands that India reduce agricultural tariffs, including those for almonds, pork, dairy products, cherries, apples and other commodities” and have also included a push to convince India to remove “high pricing barriers on imported US medical devices”.
In return, India wants its GSP status back, at least until Modi manages to juice exports enough to shore up his flagging economy, which grew at the slowest pace since 2013 in the quarter ended June. On Friday, India announced a blockbuster corporate tax cut in a bid to boost growth.
Read more: India Unleashes ‘Big Bang’ Corporate Tax Cut, Triggering Massive Stock Rally
Trump wants access for US dairy products as well. As Bloomberg reminds you, India “does not allow imports of US milk and dairy products on religious and cultural grounds”. The White House has also fumed about high tariffs on Harleys.
The idea, apparently, is for Trump and Modi to sign the deal at the UN General Assembly following a joint stadium rally in Houston on Sunday.
Trump will join Modi in Texas for the event, dubbed “Howdy Modi!”.
If you’re starting to get the feeling that Trump is increasingly predisposed to signing “interim” or “limited” trade deals that really just amount to a rolling back of barriers he himself put in place, you’re not alone.
That’s not to say the US president isn’t making some incremental progress, it’s just to say that the “art of the deal” is manifesting itself in a series of bi-lateral agreements that seem to fall far short of the kind of sweeping “victories” he promised on the campaign trail.
