US midterms point to faster trade talks with India and possible tariff hikes

UPDATE - follow-up to U.S. midterm elections impact on India: faster trade deal talks and higher tariffs likely: Democratic control of the U.S. Senate and House of Representatives after the midterm elections will likely speed up trade talks between India and the United States. Trade and geopolitical experts say President Donald Trump may increase tariff pressure on India to quickly close a trade deal and show a domestic win. Ajay Srivastava, founder of the trade think-tank Global Trade Research Initiative, notes that foreign policy leverage with Russia, China, and Iran has failed. Mr. Trump needs a quick win and will use executive powers to pressure India for a deal that secures market access for U.S. agricultural and industrial goods. Leaders from both nations have stated the deal is nearly ready, while India has held out for clear advantages over its competitors. Deep Pal, Director of Geopolitics and Policy at the Koan Advisory Group, explains that decisions must appeal to core Republican voters. Indian negotiators view the election results as an opportunity to break the current deadlock and push for a better deal. However, Mr. Pal adds that the White House tends to double down rather than step back. The U.S. has tools to levy more tariffs without congressional approval. The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 allows tariffs of up to 100% on countries importing Russian oil and gas, though Mr. Trump has kept it in abeyance. The U.S. is also investigating India under Section 301 of the U.S. Trade Act of 1974 over strategic excess manufacturing capacity. A 10% tariff is already in place under a Section 301 investigation regarding forced labour goods. These add to the 50% tariffs on steel and aluminium imposed last year under Section 232 of the Trade Expansion Act of 1962, which remain valid despite the U.S. Supreme Court striking down the reciprocal tariff policy in February.

Context

Trade negotiations between large economies often involve complex leverage tactics like tariffs and sanctions to extract concessions in market access. U.S. presidents frequently use executive authority under trade acts to bypass legislative gridlock when shaping foreign commerce policy. Indian trade officials continuously balance the urgency of securing export advantages against the risk of protecting domestic industries from sudden import duties.