In an interview with CNBC-TV18, Linscott said, “I think both sides are better prepared for this kind of negotiation. So, I’m quite optimistic. The negotiations will be wide-ranging, but both sides have learned valuable lessons from past talks.”
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Linscott believes that tariffs will play a significant role in upcoming negotiations. “President Trump is clearly always preoccupied by tariffs. He feels that many countries around the world do not play fairly with tariffs, and US tariffs are too low,” Linscott remarked. As a result, the US is likely to press for tariff increases, particularly in industries like steel and aluminium, where Trump has consistently argued that unfair trade practices undermine the American economy.
The US will also prioritise opening up India’s market for a broader range of goods and services. During the first Trump administration, talks centred around limited tariff reductions and agricultural market access. However, under Trump 2.0, Linscott expects the two leaders to “put everything on the table.” This includes tariffs and non-tariff barriers, intellectual property rights, and market access for digital services.
Edited Excerpt from the Interview:
Q: When Donald Trump and Prime Minister Modi meet for the first time after the Trump administration was sworn in for a second time, do you think we’ll start from where we left off, trade negotiations in Trump 1.0?
Linscott: I think they will in broad terms. The deal discussed and negotiated during the first Trump administration was limited. There were a few tariffs on the table. There was some market access for agriculture. There were obvious benefits under the Generalised System of Preferences programme (GSP), but they were limited. This time, the two leaders will agree that we should start a trade negotiation, seek to conclude it ambitiously, perhaps by the end of the year, and essentially put everything on the table. Tariffs, market access, non-tariff barriers, goods and services, intellectual property rights. That’s where it will lead. It will be a hard negotiation. There’s no doubt about it. There will be sensitive areas for both sides. But they gained experience the last time around. I was a negotiator at that time. Both sides are better prepared for that kind of negotiation. So, I’m quite optimistic.
Q: What we’d like to understand are the areas where you expect the US side to expect more trade concessions?
Linscott: Certainly tariffs. That will be a priority. President Trump is clearly always preoccupied with tariffs. He feels that many countries worldwide do not play fairly with tariffs and that US tariffs are too low. So, he’s very focused on raising US tariffs, perhaps in certain sectors like steel and aluminium, to be in place for some time, but also looking for trade deals. And tariffs will be a preoccupation, certainly in the area of goods.
Services, particularly digital services, will also be on the table. This area was not a high priority during the Biden administration. So, we’ll switch back to that being on the table. Areas like intellectual property rights, as I referenced before. So, it will be wide-ranging.
I expect India and Prime Minister Modi will also have wide-ranging expectations. This should be a two-way street in terms of trade negotiations.
Q: Trade negotiations always have to be win-win. Which areas do you expect the two sides to clash or the negotiations to be tough?
Linscott: I highlighted agriculture. And yet, agriculture always presents difficulties and sensitivities. Each country will have constituencies that don’t want to open up very much. So, I think agriculture will be complicated.
Digital is an area where India is a world leader. It’s had tremendous success over many years. The US has a trade deficit in services with India. That’s unusual. It’s more common that there’s a trade deficit on goods, but there is a trade deficit on services. Yet there are a lot of questions about the potential for new digital services taxes or data localisation requirements. A lot is up in the air. So, that could be a challenging area for negotiation.
Watch the accompanying video for the entire conversation.
