Modi in DC: Trump’s reciprocal tariffs threaten to cast a shadow on the visit
Modi arrived in the US capital from France and headed straight to Blair House, the presidential guest house next to White House
Washington: Prime Minister Narendra Modi landed in Washington DC on Wednesday evening eastern time (early Thursday morning IST) for an official working visit to meet President Donald J Trump, even as Trump’s decision to announce reciprocal tariffs on countries, which have higher tariffs on US imports threatened to cast a shadow on the visit.
Modi arrived in the US capital from France and headed straight to Blair House, the presidential guest house next to White House, where he will stay.
Soon after landing, the PM posted on X, “Landed in Washington DC a short while ago. Looking forward to meeting @POTUS Donald Trump and building upon the India-USA Comprehensive Global Strategic Partnership. Our nations will keep working closely for the benefit of our people and for a better future for our planet.”
On Thursday morning, top Trump cabinet officials are expected to call on Modi. Later in the evening, Modi will have a restricted bilateral meeting with Trump in Oval Office, followed by delegation-level talks and a joint press conference. Trump will then host a dinner for Modi.
This level of early in-person contact between top leaders is unprecedented in the India-US relationship, with Modi becoming only the fourth leader — after the prime minister of Israel and Japan and the king of Jordan — to meet Trump since his inauguration, within the first month of the new administration.
On the agenda include issues related to trade, investment, defence, energy, immigration and the wider strategic convergence between the two countries on the Indo-Pacific, a code for China’s aggression in the region, Quad and the situation in West Asia, including the India-Middle East-Europe Economic Corridor.
But Trump’s decision to announce reciprocal tariffs on Thursday morning threatens to cast a shadow on the visit, for India is among the countries most likely to be affected by Trump’s announcement.
At the regular White House press conference on Wednesday, asked if the reciprocal tariffs will happen before Modi’s visit, press secretary Karoline Leavitt said, “I do believe it will come before the Prime Minister's visit tomorrow, and I will let the President discuss the details on the reciprocal tariff front, but this is something he believes strongly in.”
Leavitt said there was very “simple logic” as to why the President wanted to impose reciprocal tariffs. “It's the golden rule, which we all learned when we were growing up in school: treat others the way you want to be treated. And far too many nations around this world have been ripping off the United States of America for far too long. And that’s why the President believes this will be a great policy that will benefit American workers and improve our national security.”
Later in Oval Office, during the swearing-in ceremony for Tulsi Gabbard as the director of national intelligence, asked about the tariff announcement, Trump said that he intended to sign the order either later on Wednesday or early Thursday morning (eastern). This means he will announce tariffs before the meeting with Modi.
Peter Navarro, Trump’s top trade advisor in the White House and someone considered to be the architect of the tariff policy, told CNN, “What’s going to happen is we are going to look at all of our trading partners, starting with the ones with which we run the biggest deficits, find out if they are cheating the American people, and if they are, we are going to take measures to correct that wrong.” Navarro said that the US administration will also carefully study non tariff barriers used by countries.
Trump’s top economic advisor Kevin Hassett singled out India this week as a country with high tariffs, warning that Modi and Trump will have a lot to discuss on the issue when they meet.
India has slashed duties on a set of items in its recent budget. Delhi has also sent signals that it is willing to buy more American energy products to offset the trade deficit and reduce tariffs to enable more market access for American goods. And it has even floated the possibility of comprehensive negotiations on trade, leading to a free trade pact.
But while the summit-level talks may focus on finding a meeting ground, the immediate imposition of reciprocal tariffs can impinge on Indian exports at a time when the economy is struggling to regain its growth momentum. Reuters reported this week, based on data from the World Trade Organization, that India's simple average tariff rate is 17%, compared to about 3.3% for the US. On a trade-weighted basis, India's rate is about 12%, vs the US rate of 2.2%.
Shoumitro Chatterjee, an assistant professor of economics at John Hopkins University and a trade specialist, calculates that India ranks eighth among the countries with which the US has a trade deficit. Sectorally, based on average tariffs between 2021 and 2023, the figures show a disparity in tariff rates.
On agriculture, the most politically sensitive sector, Chatterjee found that India’s average tariff on US imports is 41.8%, while US average tariff on Indian imports is 3.8%, with the result that the US average agri export to India between 2021 and 2023 was $1.6 billion while Indian agri exports to US was $7.1 billion. On transport equipment, Indian average tariff is 14.9% while US average tariff is 0.9%, with the result that Indian exports to US between 2021 and 2023 was $4.4 billion while US exports to India was $0.9 billion. From pharma to stone, glass, metal and pearls, it is a similar story; India has higher tariffs than US on the same products, and India exports more to the US than the other way round.
But there is hope among Indian officials that despite the politically awkward optics that tariffs may bring and the controversy around the manner of deportation of illegal Indian immigrants that rocked the Parliament last week, the Modi-Trump summit and the subsequent joint statement will show that the broader India-US strategic partnership is on track and lay out pathways to manage differences.
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