India and US have postponed a key meeting of chief negotiators meant to finalise the interim trade deal.
The delay comes amid major changes in US tariff policy after the US Supreme Court struck down Trump's earlier tariff programme.
After resetting a 10% global tariff under Section 122, Trump raised it to 15% within 24 hours, the highest level allowed under the law.
India, US Put Interim Trade Talks on Hold Amid Trump's 15% Tariff Move
Both countries have agreed to reschedule the talks to a later date, after taking time to assess recent developments and their possible impact on the trade deal
India, US Put Interim Trade Talks on Hold Amid Trump's 15% Tariff Move
Summary
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India and United States have decided to postpone an important meeting between their top trade negotiators that was due to start in Washington on February 23. The meeting was meant to finalise the legal text of the interim trade agreement.
The Indian team, including Chief negotiator Darpan Jain, was scheduled to start the three-day meeting on February 23. However, following this development, no new date has been announced yet.
Both countries have agreed to reschedule the talks to a later date, after taking time to assess recent developments and their possible impact on the trade deal. The meeting will be rescheduled at a mutually convenient date, news agency PTI reported.
The interim trade deal has been in negotiation for weeks as both sides work to reduce barriers on goods traded between them and boost economic cooperation.
The move comes at a time of changing tariff policies in the US, following the recent decision by the US Supreme Court that affected the way President Donald Trump can impose tariffs.
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On February 20, US Supreme Court struck down Trump's earlier, broader tariff programme. In a 6-3 ruling, the court said he had gone beyond his legal powers by using the International Emergency Economic Powers Act of 1977 to impose wide-ranging tariffs.
Following this, Trump signed an executive order under Section 122 of the Trade Act of 1974, to reset the temporary tariff to 10% on imports from its trading partners.
The White House said this 10% tariff would apply to countries including India, even if they had earlier agreed to higher tariff rates under previous trade arrangements with the Trump administration.
However, less than 24 hours of signing the executive order, Trump announced that he is increasing the temporary import tariff on goods to 15%. This marks the highest level of tariff allowed under the law he is using.
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In a post on Truth Social, Trump said he was raising the global tariff to the "fully allowed" 15% level because many countries had taken advantage of the US for decades.