India struggles with Trump

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Just last week, India's commerce minister said he was confident of reaching a deal with his "very dear friends" on the US trade team.

President Donald Trump also called India a "good friend" yesterday, as he said it will likely face tariffs of 20% to 25% — higher than those imposed on others and close to the original 26% rate he threatened at the outset.

India's trade troubles are an ominous sign for Asia, where several large agreements are still hanging in the balance — all the more so since Prime Minister Narendra Modi is supposed to be a close Trump ally. That triumphant "Howdy, Modi!" rally in Texas seems a long time ago now.

Modi and Trump at the "Howdy, Modi!" rally in Houston in September 2019. Photographer: Saul Loeb/AFP/Getty Images

Indian officials were hoping to sneak below the 19% rate secured by Indonesia and the Philippines. With Trump's Aug. 1 deadline looming, Trade Representative Jamieson Greer said more time was needed to clinch a deal due to India's historic reluctance to open up its markets.

They may not be the closest of trading partners — the US relies on India for some 2.3% of its exports — but America is India's third-largest foreign investor. It's also increasingly reliant on Indian manufacturing — one report found India has overtaken China as the largest smartphone exporter to the US.

Most importantly, New Delhi is an important regional counterweight to China.

The same is true of South Korea and Taiwan, export powerhouses with large US trade surpluses. Both are still waiting for deals, suggesting that the geopolitical dimension isn't uppermost for Trump.

Then there's China. After months of tariff escalation then de-escalation, observers largely expect an extension of their truce, with Trump due to make the final call just as he angles for a meeting with President Xi Jinping.

For Modi, that means he'll have to stomach higher duties for now and hope he can convince Trump to lower them over time. — Katia Dmitrieva

US Treasury Secretary Scott Bessent and Greer at a press briefing after US-China talks in Stockholm yesterday. Photographer: Magnus Lejhall/TT News Agency/AFP/Getty Images

Global Must Reads

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A nationalist sculpture in Hargeisa, Somaliland. Photographer: Eduardo Soteras/Getty Images

Singapore's government apologized for a sinkhole that swallowed a car and will set up a panel to investigate what caused the crater to open up.

Colombian President Gustavo Petro rebuked the US, telling Washington "not to interfere" in his country's justice system after Secretary of State Marco Rubio criticized the conviction of former leader Álvaro Uribe.

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Ivory Coast President Alassane Ouattara, 83, will seek a fourth term as leader of the world's biggest cocoa-growing nation in elections scheduled for Oct. 25.

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Chart of the Day

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And Finally

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