Trump optimistic on India trade deal despite criticism of high tariffs
Let's decode this India US trade signal. President Trump said a trade deal with India is within reach, even as he accused India of charging high tariffs for years that are now being reversed. His comment came as a US delegation led by Brendan Lynch wrapped up a round of talks in India. So what's the real story? Both sides are negotiating a bilateral trade agreement, and tariffs are the sticking point. Why does this matter to you? Trade policy, tariffs, and the WTO often appear in your GK and reasoning sections. Bottom line for the exam, remember the India US bilateral trade deal talks and the tariff tug of war.
U.S. President Donald Trump reacts as he delivers remarks to reporters about his administration's support for coal energy production, among other topics, in the Oval Office at the White House in Washington, D.C., U.S., June 4, 2026.
Jonathan Ernst
US President Donald Trump expressed confidence that a US-India trade deal is within reach, while simultaneously accusing New Delhi of historically exploiting the US with high tariffs that he said are now being reversed.
The remarks come as a US trade delegation, led by chief negotiator Brendan Lynch, wrapped up a critical round of negotiations in India on Thursday.
“For years, India took advantage of the United States... They charged us tremendous tariffs and paid nothing... Now it is the exact reverse, and we are making a lot of money with India. But we will get to a deal because I like your Prime Minister a lot. He is a good friend of mine, and we get along well. We have a good relationship,” he said, addressing the media at the White House on Thursday.
Trump was answering a question about the India-US bilateral trade deal, which the US is pushing to conclude early.
The US President used the example of iconic American motorcycle manufacturer Harley-Davidson yet again to illustrate India’s high tariffs. “They wouldn’t let Harley-Davidson sell their bikes. They would charge 200 per cent tariffs. So Harley-Davidson was precluded. They ended up going to India and building their own plants, which is unfortunate that that happened, but it happens. It was before me,” Trump said.
The US and India had announced a framework of an interim deal on February 7 2026. “The tariff scenario in the US changed dramatically after that which needs to be factored into the final deal,” a source tracking the matter said.
India had agreed to additional US tariffs of 18 per cent within the framework, as at that time the US reciprocal tariffs of 25 per cent and another 25 per cent penalty tariffs on buying Russian oil were still in place. On its part, New Delhi agreed to eliminate/reduce tariffs on industrial goods and many agricultural products.
Subsequently, the Trump regime rolled back the oil tariffs, while the US Supreme Court invalidated the reciprocal tariffs later in February. It was replaced by a 90-day global tariff of 10 per cent by Trump, which is set to lapse on July 24.
But India is now facing possible Section 301 tariffs of at least 12.5 per cent (for forced labour), which could increase after the second Section 301 investigation report (on excess capacity) is out.
“There is a possibility that the US would offer to cap the tariffs under the BTA (interim deal) at 18 per cent or so. That is what is being negotiated. India has demanded more market access than competing countries such as Vietnam, Bangladesh and Indonesia,” the source said.
Ensuring that India gets an edge over its competitors could be difficult as it would depend on the individual deals that the countries strike with the US, but it will be difficult for New Delhi to accept a pact without such an assurance, the source added.