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Trump dangles trade deal with India as global tariff offensive intensifies

As US President slaps fresh tariffs on 14 nations, he signals India is 'close' to a breakthrough — linking diplomacy, commerce, and conflict de-escalation in bold remarks.

Amin Masoodi 08 July 2025 04:47

US President Donald Trump

US President Donald Trump

In a sweeping move aimed at recalibrating global trade dynamics, US President Donald Trump has indicated that a bilateral trade deal with India is “very close,” even as Washington dispatches tariff warning letters to 14 countries.

Speaking at a press briefing ahead of a bilateral dinner with Israeli Prime Minister Benjamin Netanyahu on July 7 evening, Trump confirmed that the US has imposed tariffs as high as 40 % on select imports from countries including Japan, South Korea, Indonesia, and Thailand. The tariffs take effect from August 1.

“Now, we’ve made a deal with the United Kingdom, we’ve made a deal with China… We’re close to making a deal with India,” Trump said. “Others we met with, and we don’t think we’re going to be able to make a deal — so we just send them a letter. If you want to play ball, this is what you have to pay.”

The letters personally signed by Trump have reportedly been sent to Bangladesh, Cambodia, Kazakhstan, Malaysia, South Africa, Serbia, Tunisia, and other nations. The move underscores a combative strategy aimed at penalizing what Trump called “unfair” trade practices.

“Many countries have been ripping off America by charging exorbitant tariffs. We’re simply leveling the field,” he said. “What the tariffs are doing is driving people and companies back into the United States.”

India, for its part, is seeking an extended deadline to impose reciprocal tariffs—particularly in light of the new 25 percent tax the U.S. has levied on certain goods from Japan and South Korea.

Trade and diplomacy collide

Trump also suggested that his tough trade posture played a role in de-escalating recent tensions between nuclear-armed rivals India and Pakistan.

“All this happened over the past three weeks — we stopped a lot of fights,” he said, referring to flare-ups in conflict zones ranging from South Asia to the Balkans and Central Africa. “The big one, frankly, was India and Pakistan. We stopped that over trade. We told them—we’re not going to deal with you if you’re going to fight.”

The comments appear to reference heightened tensions following the recent Pahalgam terror attack, which led to renewed strains between New Delhi and Islamabad.

Trump claimed that his administration’s approach helped avert what he described as a potential nuclear conflict. “They’re both nuclear powers,” he said. “And I think stopping that was very important.”

Strategic calculus

As India negotiates for breathing space on retaliatory tariffs, observers say New Delhi must weigh the potential benefits of a U.S. trade agreement against Trump’s unpredictable tariff regime.

The remarks signal a high-stakes chapter in India-US economic ties — one where trade leverage, geopolitical threats, and diplomatic pressure are increasingly part of the same equation.

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