Trump: India-US Tariff Dispute Will Be Solved

U.S. President Donald Trump expressed optimism on September 8, 2025, about resolving ongoing trade tensions with India, signaling a potential thaw in relations strained by recent tariff hikes. In a Truth Social post, Trump announced that negotiations between Washington and New Delhi are ongoing to address trade barriers, stating, “I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations. I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!”

The comments come after the Trump administration imposed tariffs of up to 50% on Indian goods, including a 25% reciprocal tariff and an additional 25% penalty tied to India’s continued imports of Russian crude oil. These measures, effective since August 27, 2025, have sparked concerns in India, the U.S.’s largest export market, with Chief Economic Adviser V. Anantha Nageswaran warning that the tariffs could reduce India’s economic growth by 0.5–0.6 percentage points this fiscal year. Key industries such as textiles, gems and jewelry, and automobiles face significant risks, with estimates suggesting up to 55% of India’s $87 billion in merchandise exports to the U.S. could be affected.

In response, India has taken steps to mitigate the economic impact, including reducing goods and services tax (GST) on consumer items to boost domestic consumption and exploring alternative export markets like Vietnam and Bangladesh to offset losses. Indian officials have also defended the country’s energy strategy, emphasizing a balanced approach to sourcing oil, including from Russia, to meet the needs of its 1.4 billion population.

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Trump’s latest remarks mark a shift from his earlier rhetoric, when he labeled India a “dead economy” amid frustrations over trade deficits and India’s Russian oil purchases. His renewed warmth toward Prime Minister Narendra Modi, whom he called a “very good friend,” suggests a desire to preserve the strategic partnership. The two leaders last spoke in June 2025 during the G7 summit, where they reaffirmed commitments to deepen cooperation in defense, technology, and investment.

The U.S.-India Business Council has urged both sides to exercise restraint, noting that the bilateral relationship, with $131.84 billion in trade in 2024-25, has “too much at stake.” The council welcomed the prospect of renewed dialogue, encouraged by recent positive exchanges between Trump and Modi. India has also signaled flexibility, previously offering to reduce tariffs on 60% of U.S. imports and increase purchases of American energy and defense equipment, though sticking points remain, particularly over agriculture and dairy market access.

As both nations aim to more than double bilateral trade to $500 billion by 2030, the upcoming talks between Trump and Modi could be pivotal in de-escalating tensions and forging a mutually beneficial trade agreement. For now, India’s government remains cautiously optimistic, with officials indicating that a U.S. delegation is expected in Delhi by mid-August to continue negotiations.

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