Trump responded to Europe with a US-India trade deal

US President Donald Trump’s announcement on Monday that he had agreed to a trade deal with India came hot on the heels of Europe’s trade deal with New Delhi, signaling Washington’s unwillingness to outbid its global rivals.

The US deal comes after the European Union and global trading partners such as India, China and Canada signed their own trade deals starting in the new year, leaving America happy when it comes to imposing punitive tariffs on trading partners. appears displaced.

Analysts said these deals, especially the EU-India pact, were likely “Lighting a fire” under the US. To settle and dust off his stalled trade deal with India, but it came sooner than many expected.

Trump Posted by Truth Social On Monday, the US will reduce the basic tariff on India from 25% to 18%. He said Washington would remove an additional 25% tariff imposed on New Delhi last summer for buying oil from Russia.

Posting on the social media platform Truth, Trump said India would stop buying Russian oil and buy “over $500 BILLION in US energy, technology, agriculture, coal and many other products” and remove trade barriers with the US.

The US-India deal is what happened It was supported by Asian markets Tuesday is “a clear response to those who think the EU will limit or speed up the US on trade,” said Terry Haynes, founder of the policy analysis firm Pangea. explained LinkedIn is.

“The US-India deal is Trump’s next major natsec (National Security Strategy) trade deal in terms of economic ‘interdependence’ with a major US ally/major non-aligned country,” Hines noted.

“This is a strong signal that Trump is ‘walking and chewing gum at the same time’ rather than letting geopolitics distract from US economic focus and continuing to make major trade deals,” he added.

The swiftness of the US-India pact is not lost on pundits as it comes in a week. EU-India Free Trade Agreement (FTA) has been achieved.

The FTA saw regional power blocs agree to reduce tariffs to zero on a range of each other’s imports, but they also said the agreement would be phased in over a number of years. Still, both sides welcomed the agreement reached after a decade of negotiations “the mother of all deals.”

Farwa Aamer, director of South Asia initiatives at the Asia Society Policy Institute, commented on Tuesday that the US-India pact was “interesting because the deal comes after the EU-FTA”.

“While the India-US trade talks have dragged on for some time, a deal with the EU could have spurred the US to move forward. Again, it was the leadership-level deal we’ve been talking about all along that would allow this deal to turn around,” he said in emailed comments.

Indian Prime Minister Narendra Modi confirmed the final agreement with the US. Post on X On Monday, he said he was “pleased that products made in India will now have a reduced tariff of 18%,” as he thanked Trump for his leadership.

Although official details of the deal are scarce, the agreement is seen as a “win-win” for both parties.

“It’s a very big deal because it’s behind the EU’s free trade agreement,” Ranen Banerjee, partner and economic advisor at PwC India, told CNBC’s Amitoj Singh.

“With the arrival of the EU Free Trade Agreement and the US (deal), it will give India a huge boost in jobs and employment. So I would say it’s a win-win for both countries.”

Arpit Chaturvedi, South Asia consultant at Teneo, agreed that the US-India deal “must be read” alongside India’s free trade agreement with the EU.

“The deal has taken some pressure off New Delhi by offering an alternative Western economic foothold in the face of global tariff volatility. Nevertheless, the US deal has great strategic weight,” he said in an emailed analysis on Tuesday.

“Stabilizing trade ties with Washington therefore goes beyond tariff arithmetic and strengthens India’s position in Western supply chains and strategic calculations. This deal also represents a restoration of the India-US strategic relationship, allowing both sides to participate on a relatively equal footing.”

Not everyone will be immediately affected by the US-India announcement, though some analysts caution that more details are needed to gauge the broader and longer-term impact of the deal.

“PM Modi’s social media post is silent on the Russian oil issue. India should also reduce its tariffs and non-tariff barriers, but the exact details of these adjustments are yet to be announced,” said Samiran Chakraborty, chief India economist at Citi.

“India is also likely to buy a large amount of US goods (President Trump said $500 billion), but the time frame … and specifics are not yet available,” he added.

Paul Donavon, chief economist at UBS Global Wealth Management, commented on Tuesday that, as we know, the deal will have little impact on US citizens who have seen domestic prices rise as a result of Trump’s global tariff policies, and the additional costs will be passed on to consumers.

“Trump’s social media post suggests a deal has been struck with India to lower tariffs paid by US importers … (but) the move will have little effect on the US affordability crisis — India’s imports are less than 3% of the US total. While tariff increases are easily passed on to consumers, tariff cuts are (oddly) less likely to pass. The UBS podcast Tuesday.