(Zero Hedge)—President Donald Trump hinted overnight at a potential easing of the trade war with Beijing, suggesting that the current 145% tariffs on Chinese goods “could come down substantially”—though he added, “but it won’t be zero.” The trade news extended beyond China as Vice President Vance continued his four-day visit to India, raising new hopes for a swift trade agreement.
According to Bloomberg, citing sources, the Narendra Modi-led administration may have extended an olive branch to the Trump administration by potentially lowering trade barriers for U.S. motorcycle maker Harley-Davidson, specifically for motorbikes with engine capacities over 750cc or more in India.
The offer aims to tear down tariff barriers largely for the iconic American bike maker Harley-Davidson Inc. and will expand on India’s budget-time concessions when duties on motorcycles up to 1600cc were slashed to 40% from 50% earlier. The market for such high-capacity motorcycles in India is a tiny fraction of the nearly 16 million units sold every year, making this concession relatively painless for the local industry.
India is also willing to extend a similar zero-for-zero duty arrangement to auto parts, another category where it sees export competitiveness and minimal domestic resistance, people familiar said.
The Harley-Davidson olive branch also comes after Trump slapped 26% reciprocal tariffs on India, but soon after, paused for 90 days so both sides could hammer out trade deals. Still, the baseline 10% tariff remains.
On Monday, India’s Prime Minister Narendra Modi and VP Vance said trade talks between both countries made “significant” progress.
On Tuesday, VP Vance also touted progress toward a U.S.-India trade deal while speaking in the northwestern Indian city of Jaipur.
“Both of our governments are hard at work on a trade agreement built on shared priorities, like creating new jobs, building durable supply chains and achieving prosperity for our workers,” VP Vance said, adding, “In our meeting yesterday, Prime Minister Modi and I made very good progress on all of those points, and we’re especially excited to formally announce that America and India have officially finalized the terms of reference for the trade negotiations. I think this is a vital step toward realizing President Trump and Prime Minister Modi’s vision because it sets a roadmap toward a final deal between our nations. I believe there is much America and India can accomplish together.”
VP Vance also noted: “Americans want further access to Indian markets. This is a great place to do business, and we want to give our people more access to this country. And Indians, we believe, will thrive from greater commerce in the United States. This is very much a win-win partnership. It certainly will be far into the future.”
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