The two leaders met at the White House shortly after Trump announced his intent to impose reciprocal tariffs on countries with high tariffs on US imports. However, he refrained from immediate action, instead signing an order directing his administration to submit a report by April 1. Trump urged India to lower its tariffs and emphasised the need for a fair-trade environment while acknowledging India’s recent efforts to reduce them.
Despite Trump’s push for tariff cuts, the personal rapport between the two leaders was evident during their discussions. At the subsequent press conference, Trump confirmed that the US would increase military sales to India, including F-35 jets. However, the Indian government clarified that no formal process for acquiring the F-35 jets had been initiated.
Prime Minister Modi emphasised the goal of signing an agreement that would help both countries double their bilateral trade to $500 billion by 2030.
To delve deeper into the meeting’s outcomes, CNBC-TV18 spoke with Rick Rossow, Senior Fellow at CSIS; Mukesh Aghi, President & CEO of USISPF; and Eamon Javers, White House Correspondent at CNBC.
Edited Transcript:
Q: How do you see the visit overall? The positives, the body language?
Rossow: It looked pretty good from what we saw with the press conference. Still waiting for all the details and what’s hammered out in the joint statement. I think the big thing we’re looking for is, apart from announcing a trade deal, what are the other things India put on the table to try to appease Trump to make sure India’s not a more serious target in this tariff war that also got announced just before the summit? So, a lot on the table that we still have to parse out the details for, but from the press conference, it looked pretty positive.
Q: Civil nuclear engagement was a priority before this visit. Do you believe this visit will pave the way for cooperation on small modular reactors in India? When both leaders said that, we discussed this in great detail and will proceed with this engagement. What are the nittie-gritties, according to you?
Rossow: Small Modular Reactors (SMRs) remain primarily on paper. So, to imagine that SMRs will change lives in India or the United States is still a decade or further away. But as we saw, even before the visit in the Finance Minister’s budget speech, the government did commit to going back and trying to amend the nuclear liability law. That has been the main barrier precluding American nuclear cooperation with India ever since the deal was first conceived 20 years ago. So, if the government can do that, reduce the cost for an American company to begin supplying, not just on small modular which is a future thing, on today, as India looks to expand its nuclear, the United States can become a bigger supplier. So, the ball goes back to Delhi and Parliament to see if they can bring that law up.
Q: Trump said that the US could become India’s number one energy supplier. India will buy a lot more energy, LNG, from the US. They’re going to have defence deals with us. How do you think that went? Do you think these were low-hanging fruit for India?
Rossow: When President Trump talks about trying to get India to buy more from the United States, the two things that the Indian government controls are defence material and hydrocarbons. So, if we’re trying to push India to buy more to offset the trade balance, those are the two things that Prime Minister Modi’s bailiwick can do. So, it’s not surprising that those got pushed. Would the United States be number one? That’s tough. President Trump is known to sometimes inflate numbers and that kind of thing. However, over the long term, India is about to become the third largest economy in the world in the next couple of years. So, all these numbers we’re talking about will only go up.
Q: Were you surprised when he said we would sell more defence equipment and eventually F-35s? That was also discussed in the first Trump administration. But do you think India will make such a purchase?
Rossow: F-35 was a little bit surprising to see. The United States has been reluctant, mostly because of some of India’s Russian equipment; we don’t want to see the two things operating co-mingling side by side. The press conference was slightly surprising, but there have been whispers for a while in hallways in Washington. Can we put that on the table? At the very least, it could end up like the nuclear deal. Even if nuclear cooperation and trade never actually happened, the fact that we put meaningful and substantive things on the table unlocks other areas of cooperation. We’re still in a trust-building phase, and saying that we’ll put the F-35, which we only do for treaty allies, is another big show of trust.
Q: What are your thoughts on the announcement of reciprocal tariffs?
Aghi: Trump has been discussing reciprocal tariffs for some time and decided to sign them today. They are not targeted at India or any specific countries but at everybody. If you charge a 5% tariff on my goods, I will charge you 5%. If you charge 50%, I will charge you 50%. So, this was a way to negotiate with other countries and bring equality to the whole tariff system.
Q: Will this order on reciprocal tariffs take effect immediately, or is it a study right now?
Javers: A lot of folks on Wall Street were expecting immediate tariffs today, and what we learned earlier in the day on Thursday was that, no, this is not an immediate implementation of tariffs. This is a study to figure out how to implement these tariffs in every country worldwide. They’re issuing this study, which’ll be completed by April 1st and then by April 2nd, they say, they’ll be able to implement tariffs that execute on that date. We’ll see, though. I expect this results in a massive global negotiation as every country comes to the West Wing to work out trade deals individually. Donald Trump wants to be the dealmaker-in-chief, and this is his opportunity to go country by country and cut a new set of deals. This gives him a lot of wiggle room regarding those negotiations, but it also means that tariffs are not coming in place today as we stand here now, which was something Wall Street was concerned about.
Q: How do you think his statements regarding India were? He said that India has enormous tariffs, it’s right up the pecking order, Harley Davidson was a problem, and it is a difficult place to do business. Was this a maximum-pressure tactic because Prime Minister Modi is in Washington, DC?
Javers: I think that’s right. I was in the Oval Office with the President when he made those comments, and he was very tough on India in those comments. He said the tariffs are very high; it’s one of the highest, if not the highest, and he wants to change that. And behind the scenes, I know the White House was moving expeditiously over the past 48 hours to ensure that this reciprocal tariff announcement today was in place before the Modi meeting. They wanted to make sure that they announced these tariffs before the President sat face-to-face with Modi, so it was clear that his meeting with Modi was not a negotiation over whether or not this tariff announcement would happen. It’s happened. It’s done. Now, the question is, for India and Modi, what level of tariffs is Modi comfortable with on US goods, and what kind of reciprocation does he want from the US government? That negotiation can start now.
Q: What do you think is on the US wish list? What does Donald Trump want from India?
Javers: I think he wants US products to be sold in India and more access to the Indian market. And he wants, in exchange, access to all sorts of things in India, particularly raw materials, which are on his mind in a big way. So, for him, it’s an opportunity to get American companies access to markets that they might not have access to by lowering some of those tariff barriers. Also, in return, he doesn’t want cheap Indian products flooding the US and shutting down American manufacturers who are paying a much higher cost of labour.
Q: And finally, net-net, immediately, these announcements on reciprocal tariffs don’t mean anything. It’s an open threat right now and a warning to everyone to come to the negotiating table.
Javers: Yes, you can watch what happened on Wall Street today. The stock market is treading water on this announcement and is not impacted by it at all. Wall Street’s looking at that and saying, for now, this is a nothing burger compared to what we were expecting. But down the line, after the April 1 deadline, we could see tariffs start to ramp up. So that’s the timeline that Wall Street will focus on, not today.
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