Global Trade Deals Heat Up Ahead of August Deadline

The UK and India have signed a free trade agreement, expected to boost bilateral trade by over $34 billion annually. The deal, finalized after three years of negotiations, will exempt 99% of Indian goods shipped to the UK from tariffs and reduce the weighted average tariff on UK exports to India to 3% from 15%. The agreement is projected to increase bilateral trade by 25.5 billion pounds per year by 2040 and boost British economic output by 4.8 billion pounds annually. The deal is seen as a "strategic win" for India's trade diplomacy and is expected to support employment and industrial growth in India, while also strengthening both countries' positions in ongoing trade negotiations with other partners.

India's Commerce Minister Piyush Goyal says the country is making "fantastic progress" in trade deal talks with the US. Goyal made the comments after signing a free trade deal with the UK, and expressed hope that India and the US will conclude a "consequential partnership". The two countries have been negotiating a trade deal, with the US pushing for greater access to India's farm sector, a key sticking point in the talks. US President Donald Trump has set a deadline of August 1 for the deal, and both sides have expressed optimism about meeting this target.

The US and EU are racing to strike a trade deal by the White House's August 1 deadline to avoid a potentially damaging trade war. The Trump administration has threatened to impose a 30% tariff on EU imports, while the EU is preparing to impose tariffs on over $100 billion worth of US goods. A recent trade deal with Japan, which includes a 15% tariff on Japanese imports and a commitment to invest $550 billion in the US, may serve as a template for a US-EU deal. Economists warn that a sharp hike in tariffs could raise costs for consumers and businesses, and that even a 15% tariff rate would still drive up prices. The EU may be open to a 15% US tariff rate with potential carveouts for key sectors, and a deal could involve EU commitments to invest in the US and purchase American-made goods.

US President Donald Trump is visiting Scotland from July 25-29, where he will meet UK Prime Minister Keir Starmer to "refine" a recent US-UK trade deal. The deal, which took effect on June 30, includes a 10% baseline tariff on British goods and quotas on autos and aerospace exports. However, some aspects remain unfinished, such as removing a 25% tariff on UK steel and aluminum, and resolving disputes over a digital services tax on tech companies. The UK is hoping to finalize the deal ahead of an August 1 deadline, and analysts believe there may be "give and take" on issues like steel tariffs and digital services tax.

India is under pressure to finalize a trade agreement with the U.S. by August 1, when tariffs are expected to rise, with the recent U.S.-Japan agreement highlighting the urgency. India has resisted greater market access for U.S. farm goods to shield local farmers, a sensitive voting group. India's Commerce Minister, Piyush Goyal, stated that India will protect its farmers' and small enterprises' concerns. India has recently signed a trade agreement with the U.K., safeguarding sensitive areas, and is pursuing deals with the EU and Maldives, giving it flexibility in negotiations and a "multi-alignment" strategy. The U.S. is also keen to finalize a trade agreement, as it views India as a potential alternative to China in global manufacturing and a strategic hedge in the great power rivalry between the U.S. and China. Its role in the bloc could be another chip in its favour since the U.S. sees India as a counterweight to China within the emerging economies bloc.