Trump announces energy deal with India after Modi talks

US President Trump has announced a deal with Indian Prime Minister Narendra Modi for Delhi to import more US oil and gas to shrink the trade deficit between the two countries.

“They’re going to be purchasing a lot of our oil and gas. They need it. And we have it,” Trump said at a joint news briefing in Washington.

Modi said that “in order to ensure India’s energy security, we will focus on trade in oil and gas”, also pledging to invest more in nuclear energy.

His two-day visit comes as Trump ordered that US trading partners should face reciprocal tariffs – tit-for-tat import taxes to match similar duties already charged by those countries on American exports.

Trump and Modi have developed a personal rapport over the years, despite friction over trade.

“We’ve had a wonderful relationship,” Trump said as he welcomed his visitor in the US capital on Thursday.

He also said the US would increase sales of military hardware to India by millions of dollars, eventually supplying Delhi with F-35 fighter jets.

Immigration was high on the agenda, with Trump expected to ask India to take back thousands of undocumented immigrants. 

Earlier, Modi said he had also discussed space, technology and innovation at a meeting with Trump ally Elon Musk. 

Modi said: “I firmly believe with Trump we will work with twice the speed we did in his first term.”

Shortly before their bilateral, Trump ordered his advisers to calculate broad new tariffs on US trading partners around the globe, warning they could start coming into effect by 1 April.

Trump told reporters that “our allies are worse than our enemies”, when it comes to import taxes.

“We had a very unfair system to us,” the Republican president said before meeting Modi. “Everybody took advantage of the United States.”

The White House also issued a news release that fired a trade shot across the bows of India and other countries.

The document noted that the average US tariff on agricultural goods was 5% for countries to which Washington had granted most favoured nation (MFN) status.

“But India’s average applied MFN tariff is 39%,” the White House fact sheet said.

“India also charges a 100% tariff on US motorcycles, while we only charge a 2.4% tariff on Indian motorcycles.”

On Thursday, Trump acknowledged the risks of his tariff policy, as economists warned such import taxes could drive up consumer prices.

“Prices could go up somewhat, short term, but prices will also go down,” he said in the Oval Office.

But he argued the policy would boost American manufacturing and the country would be “flooded with jobs”.

Trump has already placed an additional 10% tariff on imports from China, citing its production of fentanyl, a deadly opioid that has stoked a US overdose epidemic.

He has also readied tariffs on Canada and Mexico, America’s two largest trading partners, that could take effect in March after being suspended for 30 days.

On Monday, he removed exemptions from his 2018 steel and aluminium tariffs.