2025-03-06 03:29

India currently taxes car imports as much as as 110% Trump warns of reciprocal action against India's high auto tax Tesla wants to enter India, but Musk critical of high tariffs Indian carmakers open to tax cut but not zero, sources say NEW DELHI, March 5 (Reuters) - The United States wants India to eliminate tariffs on car imports under a proposed trade deal between the two nations, but New Delhi is reluctant to immediately bring down such duties to zero even as it considers further cuts, sources told Reuters. India's high auto tariffs will feature in formal talks for a bilateral trade deal that are yet to begin, said one of the three sources, all of whom were briefed on the matter, paving the way for American electric vehicle maker Tesla (TSLA.O) , opens new tab, which is gearing up for an India launch. Taxes on cars imported into India are as high as 110%, which Tesla chief Elon Musk has criticised as being among the steepest in the world. The EV giant last year shelved its plans to enter the world's third-largest car market for a second time. Musk has now found support from U.S. President Donald Trump, who has repeatedly railed against India's high taxes and in an address to Congress on Tuesday slammed the country's auto tariffs of more than 100%, threatening reciprocal action. "The U.S. ask is for India to bring tariffs down to zero or negligible in most sectors, except agriculture," the first source said, adding the expectation on New Delhi eliminating auto tariffs was "clearer than any other". A second source said India was "listening to the U.S." and had not pushed back, adding it would respond with its position on the tariffs after consulting local industries. The office of United States Trade Representative, India's trade ministry, and the foreign affairs ministry did not respond to requests for comment. TRADE WORTH $500 BILLION After a meeting between Trump and Indian Prime Minister Narendra Modi last month, the two nations agreed to resolve tariff rows and work on the first segment of a deal by the fall of 2025, aiming for bilateral trade worth $500 billion by 2030. Indian trade minister Piyush Goyal is on a nearly week-long trip to the U.S. and on Tuesday met U.S. Commerce Secretary Howard Lutnick to pursue trade talks. He is also expected to meet the United States Trade Representative Jamieson Greer. While India is unlikely to relent to U.S. demands to reduce tariffs on auto imports to zero immediately, it has been priming the industry to prepare for a lower tariff regime and be open to competition, said the first source and a fourth person. Last month, the Indian government met domestic carmakers to decide on any tariff cuts and understand their reservations over taxes going down to zero immediately, the first source added. India's 4 million-vehicles-a-year car market is one of the most protected in the world and its domestic players have previously argued against lowering tariffs, saying such a move would dry up investment in local manufacturing by making imports cheaper. The likes of Tata Motors (TAMO.NS) , opens new tab and Mahindra & Mahindra (MAHM.NS) , opens new tab have especially lobbied against lowering import tariffs on EVs, saying it would hurt the nascent sector in which they have invested heavily. Vowing to avoid protectionist signals on trade, India last month cut import tariffs on nearly 30 items including high-end motorcycles and said it will review surcharges on luxury cars. Sign up here. https://www.reuters.com/business/us-eyes-zero-tariff-cars-india-trade-deal-tesla-entry-nears-sources-say-2025-03-05/

2025-03-06 03:03

MUMBAI, March 6 (Reuters) - The Indian rupee is likely to inch up at open on Thursday, adding to the previous day's advance, spurred by the dollar's decline on worries that growth in the world's largest economy is slowing. The one-month non-deliverable forward indicated that the rupee will open at 86.88-86.90 to the U.S. dollar compared with its previous close of 86.9550. The rupee rose 0.2% on Wednesday, its biggest one-day jump in more than three weeks. The dollar index dropped 1%, taking its decline this week to 3%. "The dollar is all sorts of trouble.. U.S. growth risks are rising and the U.S. tariffs risk premium is being taken out," a currency trader at a Mumbai-based bank said. "This is obviously a welcome break for the rupee. However, I doubt that a substantial rally from here is likely." U.S. private payrolls growth slowed considerably in February, data released on Wednesday showed, indicating that the labour market is cooling off. The private payrolls data follows a string of disappointing data, including a slump in U.S. consumer confidence in January, along with a steep in retail sales. Monday's U.S. manufacturing activity data showed big falls in new orders and employment. "Markets have seemingly shifted their focus away from tariff rhetoric for now, and they appear to be concerned about a slowdown in the U.S. economy," MUFG Bank said in a note. The rally in the euro on the back of aggressive defensive and infrastructure spending plans by European leaders has further undermined the dollar. The euro has the highest weightage in the dollar index. Meanwhile, dollar-rupee forward premiums will be in focus, after the Indian central bank announced yet another buy-sell FX swap to shore up rupee liquidity. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.12; onshore one-month forward premium at 19.25 paisa ** Dollar index down at 104.22 ** Brent crude futures up 0.7% at $69.8 per barrel ** Ten-year U.S. note yield at 4.32% ** As per NSDL data, foreign investors sold a net $404.7 million worth of Indian shares on March 4 ** NSDL data shows foreign investors sold a net $44.6 million worth of Indian bonds on March 4 Sign up here. https://www.reuters.com/markets/currencies/rupee-extend-mini-rally-dollars-growth-worries-driven-slump-2025-03-06/

2025-03-06 00:40

Merit System Protection Board halts firing of USDA employees Judge blocked Trump from removing board's Democratic chair Watchdog agency says it is investigating other firings March 5 (Reuters) - A U.S. board that reviews the firings of federal employees on Wednesday ordered the U.S. Department of Agriculture to temporarily reinstate thousands of workers who lost their jobs as part of President Donald Trump's layoffs of the federal workforce. Cathy Harris, a member of the Merit System Protection Board, ordered the USDA to reinstate fired probationary employees for 45 days while a challenge to the terminations plays out. The decision , opens new tab was issued a day after a federal judge blocked Trump from firing Harris, a Democrat, and from removing her from her position with the board without cause before her term expires in three years. The administration is appealing that decision. "This is great news and needs to be done with all impacted agencies with similarly situated employees as fast as possible," said J. Ward Morrow, assistant general counsel at the American Federation of Government Employees, which represents some of the reinstated workers. Tanya Torst, who was fired from the U.S. Forest Service, a USDA agency, on February 15, said she would be thrilled to return to her former job fundraising for a group of six national forests, though she worried about talk of shutting federal offices nationwide and of further staff reductions later this month. "We're thrilled to come back, but we're hoping they have a place for us." The USDA and White House did not immediately respond to a request for comment. Trump and Elon Musk, the architect of the so-called Department of Government Efficiency, are spearheading an unprecedented effort to shrink the federal bureaucracy, including through job cuts. It's estimated that more than 20,000 federal employees, almost all probationary workers, have lost their jobs and another 75,000 have taken a buyout, out of the 2.3 million federal civilian workforce. Probationary workers typically have less than a year of service in their current roles, although some are longtime federal workers. Union efforts to contest the mass firings in federal court have faced procedural hurdles with judges questioning whether unions had standing to bring the cases or finding that they should have been brought to administrative boards like the MSPB. The merit board has proved to be a potential roadblock in the Trump administration's efforts to purge the federal workforce. The board hears appeals by federal government employees when they are fired or disciplined. It has already halted the firing of six other such employees at various agencies at the request of a watchdog agency whose leader, Hampton Dellinger of the U.S. Office of Special Counsel, was fired by Trump. Dellinger, an appointee of Trump's Democratic predecessor Joe Biden, on Tuesday revealed that he had asked the board to halt the firing of thousands of USDA employees. Dellinger argued that the Trump administration's firing of the probationary employees was done unlawfully and without regard to the workers' rights while circumventing regulations governing mass reductions in the federal workforce. Harris agreed, saying she found reasonable grounds to believe that the agency fired them in violation of federal law. The board ordered all probationary USDA employees terminated since February 13 to be temporarily reinstated. Dellinger in a statement welcomed the decision. He said his agency would continue investigating the firing of other federal probationary employees, and he called on federal agencies that had recently fired such workers to immediately reinstate them. "Voluntarily rescinding these hasty and apparently unlawful personnel actions is the right thing to do and avoids the unnecessary wasting of taxpayer dollars," he said. Trump removed Dellinger on February 7, but he was reinstated by a judge until a Washington federal appeals court on Wednesday allowed Trump to fire him. Dellinger told Reuters on Wednesday he was removed from his post shortly after the ruling, which is temporary while appeals court judges review the merits of the case. Sign up here. https://www.reuters.com/world/us/us-civil-service-board-reinstates-thousands-fired-usda-employees-2025-03-05/

2025-03-06 00:30

India's engineering to be hit by US tariffs, says trade body Exporters ask government to cut tariffs on certain US imports US 25% tariffs on steel, aluminium effective March 12 NEW DELHI, March 5 (Reuters) - India's small engineering goods exporters have urged the government to cut import tariffs on some U.S. goods to try and achieve more favourable trade terms as President Donald Trump prepares to implement new steel and aluminium duties, the head of an industry body said. The 25% U.S. tariffs on steel and aluminium imports, effective March 12, have raised Indian exporters' concerns about declining orders and rising costs. "Of India's $20 billion annual engineering goods exports, nearly $7.5 billion worth of shipments could be affected," said Pankaj Chadha, chairman of the Engineering Export Promotion Council, which represents more than 10,000 small exporters. The EEPC and other industry chambers have urged the government to cut tariffs on select U.S. goods with low inbound shipments, Chadha told Reuters on Wednesday. They expect that lowering such tariffs could prompt the Trump administration to offer favourable terms and move forward with a proposed bilateral trade deal. Trump has labelled India a high-tariff country and warned of "reciprocal tariffs" from early April. India's trade minister Piyush Goyal is in the U.S. for trade talks, aiming to negotiate potential tariff cuts as part of the proposed trade deal and to assess the impact of Trump's planned reciprocal tariffs. India could, for instance, cut import duty on U.S. steel scrap from 7.5% to nearly zero, and reduce tariffs on nuts, castings and forgings while offering concessions on selected agricultural and manufacturing items, Chadha said. Exporters also fear that India's planned safeguard duty of up to 14% on steel imports, aimed at protecting local steel manufacturers from cheaper Chinese imports, will drive up domestic prices and squeeze their margins. India's exports of engineering goods to the U.S. jumped 18% year-on-year in January to $1.62 billion, outpacing the sector's overall growth of 7.44% ahead of the tariffs, EEPC data showed. From April 2024 to January 2025, the first 10 months of the fiscal year, engineering exports to the U.S. rose by an annual 9% to $15.6 billion, driven by an increase in shipments of aircraft parts, electrical machinery, automobiles, industrial machinery and medical instruments. "The engineering industry faces major challenges, and the latest U.S. tariffs add pressure. Continued government support in export credit and technology is crucial for competitiveness," Chadha said. India's global engineering exports, which account for a quarter of total merchandise exports, rose to $9.42 billion in January from $8.77 billion a year earlier, though were lower than December’s $10.84 billion. Cumulative exports for April-January rose 9.82% year-on-year to $96.75 billion, EEPC data showed. Sign up here. https://www.reuters.com/world/india/indias-small-exporters-seek-import-duty-cuts-counter-us-steel-aluminium-tariffs-2025-03-05/

2025-03-06 00:18

BENGALURU, March 6 (Reuters) - The Indian rupee will weaken more against the U.S. dollar over the coming year than previously thought on escalating fears of a U.S.-led global trade war and a slowing domestic economy, a Reuters poll of FX analysts found. Analysts said expectations for a short and shallow interest rate-cutting cycle by the Reserve Bank of India are likely to exert further mild downward pressure on the rupee. While the greenback has dropped about 3% this year, the partially-convertible rupee has not made the same recovery, flipping from one of Asia's best-performing currencies in 2024 to one of the worst this year. Foreign investors have dumped over $14 billion of Indian shares from Mumbai's formerly high-flying stock market in just the first few months of this year. With no let-up in sight for U.S. President Donald Trump's appetite for threatening and levying tariffs on trading partners, and tensions with India likely, pressure on the rupee may persist. Already down over 1.6% this year, the rupee was forecast to drop over 1% to 87.88 per dollar in three months, according to a median forecast of 32 foreign exchange analysts in a March 3-5 Reuters poll. It will then trade at 87.92 in six months and down around 1.4% from now to 88.30 by end-February 2026, poll medians predicted. The currency fell about 3.0% in 2024. This marks one of the biggest downgrades for the three-month outlook in the FX poll in over a year. The currency declined for a seventh consecutive year in 2024, and if the latest forecasts hold, this downturn will mark the longest losing streak in over two decades. "Growth concerns, reciprocal tariffs and general U.S. trade policy fears are likely weighing on the rupee," said Saktiandi Supaat, head of FX research at Maybank. "We initially expected the rupee would be more resilient to potential Trump trade policies. However, the situation has changed with Trump's threats of reciprocal tariffs, which could potentially hurt India." The RBI has intervened in foreign exchange markets to prevent a steep slide in the rupee, but less so since late December 2024, following the appointment of new RBI Governor Sanjay Malhotra. Analysts said this has allowed the rupee to weaken further. "Despite a slowdown in inflows, substantial RBI intervention limited the depreciation pressures on the currency. Even when capital inflows improve, the RBI will absorb those inflows because they have to rebuild their FX reserve," said Gaura Sengupta, chief economist at IDFC First Bank. (For other stories from the March Reuters foreign exchange poll) Sign up here. https://www.reuters.com/markets/currencies/indian-rupee-poised-steeper-slide-trade-war-growth-fears-mount-2025-03-06/

2025-03-06 00:06

March 5 (Reuters) - U.S. President Donald Trump has made numerous tariff threats since returning to office on January 20, ranging from a universal duty on imports to targeted tariffs on specific sectors or countries, in a bid to get others to meet his policy demands. Trump's threats have changed over time, leaving other nations and businesses unclear about what is to come next and creating uncertainty for consumers, triggering a recent stock market selloff. Here is a roundup of Trump's trade-related steps and threats. BROAD TARIFFS A cornerstone of Trump's vision includes a phased rollout of universal tariffs on all U.S. imports. Last month, Trump tasked his economics team with devising plans for reciprocal tariffs on every country that taxes U.S. imports, as well as to counteract non-tariff barriers such as vehicle safety rules that exclude U.S. autos, and value-added taxes that increase their cost. Whereas tariffs were once the mainstay of U.S. tax revenues, in recent decades they have dwindled to a fraction of the country's tax receipts. Economists say Trump's policies will be inflationary as importing businesses, which pay tariffs, will likely pass added costs to consumers. Global trading partners potential counter-tariffs targeting U.S. agricultural, energy and machinery exports could escalate into a worldwide trade war, creating uncertainty for businesses and investors. SPECIFIC COUNTRIES Trump's tariff proposals target several key trade partners; some are listed below. MEXICO AND CANADA: The two countries were the largest trade partners of the U.S. in 2024 through November, with Mexico ranked first. Trump's new 25% tariffs on imports from Mexico and Canada took effect on March 4 as a retaliation for migration and fentanyl trafficking. The tariffs included a 25% levy on most goods from Mexico and Canada, along with a 10% duty on energy imports from Canada. Canada primarily exports crude oil and other energy goods, as well as cars and auto parts within the North American auto manufacturing chain. Mexico also exports various goods to the U.S. in the industrial and auto sectors. Canada hit back with 25% tariffs on C$30 billion ($20.7 billion) worth of U.S. imports, including orange juice, peanut butter, beer, coffee, appliances and motorcycles. The Canadian government added that it would impose additional tariffs on C$125 billion of U.S. goods if Trump's tariffs were still in place in 21 days, with the potential inclusion of vehicles, steel, aircraft, beef and pork. Trump, in his March 4 address to Congress, said further tariffs would follow on April 2, including "reciprocal tariffs" and non-tariff actions to address trade imbalances. U.S. Commerce Secretary Howard Lutnick said U.S. officials might still work out a partial resolution with the two neighbors, adding that they needed to do more on the fentanyl front. CHINA: Trump levied 10% tariffs across all Chinese imports into the U.S., effective on February 4, following repeated warnings to Beijing about insufficient measures to halt the flow of illicit drugs into the United States. He followed that up with another 10% duty on Chinese goods, effective March 4, stacking on top of tariffs of up to 25% imposed on Chinese imports during Trump's first term. China responded by announcing additional tariffs of 10% to 15% on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities. Later it raised complaints about the U.S. tariffs with the World Trade Organization. EUROPE: Trump said the EU and other countries have troubling trade surpluses with the United States. He has said the countries' products will either be subject to tariffs or he will demand they buy more oil and gas from the U.S., even though U.S. gas export capacity is near its limits. The European Commission said in a statement on February 14 that it viewed the "reciprocal" trade policy as a step in the wrong direction. Trump has threatened a 25% "reciprocal" rate on European goods. Among vulnerable industries is pharmaceuticals, as U.S. firms such as Johnson & Johnson (JNJ.N) , opens new tab and Pfizer (PFE.N) , opens new tab have large plants in Ireland, which is also a major exporter of medical devices. PRODUCTS AUTOMOBILES: Trump said on March 5 that he will exempt some automakers such as the Detroit Three — Ford (F.N) , opens new tab, General Motors (GM.N) , opens new tab and Jeep-owner Stellantis (STLAM.MI) , opens new tab — from his punishing 25% tariffs on Canada and Mexico for one month as long as they comply with an existing free trade agreement. Vehicles, as per those rules, require 75% North American content in order to get duty-free access to the U.S. market. The exemption also would benefit some foreign brand automakers with large U.S. production footprints, including Honda (7267.T) , opens new tab and Toyota (7203.T) , opens new tab, but some competitors that don't comply would have to pay the full 25% tariffs. Trump had also floated the idea of 100% or greater tariffs on other vehicles, including potentially EVs. The automobile industry accounted for imports of more than $202 billion from Canada and Mexico combined in 2024. METALS: On February 9, Trump said he was going to put tariffs on imports of all steel and aluminum, used by automakers, aerospace companies, and in construction and infrastructure. The U.S. is the world's largest aluminum importer and the second-largest steel importer, with more than half of those volumes coming from Canada, Mexico and Brazil. Trump on February 25 ordered a new probe into possible new tariffs on copper imports to rebuild U.S. production of the metal critical in electric vehicles, military hardware, semiconductors and a wide range of consumer goods. The U.S. produces domestically just over half the refined copper it consumes each year. SEMICONDUCTORS: Trump said tariffs on semiconductor chips would also start at "25% or higher," rising substantially over the course of a year, but didn't clarify when these will come into effect. Taiwan Semiconductor Manufacturing Co (2330.TW) , opens new tab, the world's largest contract chipmaker, makes semiconductors for Nvidia, Apple and other U.S. clients, and generated 70% of its revenue in 2024 from customers based in North America. LUMBER: Trump on March 1 ordered a new trade investigation that could heap more tariffs on imported lumber, adding to existing duties on Canadian softwood lumber and 25% tariffs on all Canadian and Mexican goods. Sign up here. https://www.reuters.com/world/us/all-donald-trumps-tariff-threats-2025-01-28/