Key Points

The report highlighted that the ongoing talks have once again hit a familiar deadlock, with both sides showing limited progress. A major concern in these discussions is China's dominance in rare earth processing, an area where it controls 90 per cent of the global capacity.

These rare earth materials are crucial for various industries, especially in electric vehicles, electronics, and clean energy.

China has already started placing curbs on the export of rare earths. The report mentioned that this move is beginning to affect the global automobile sector, particularly electric vehicle production in the US, Europe, and India. The situation adds more complexity to the ongoing trade talks.

The current deadline for tariff decisions was July 9, 2025. While US President Donald Trump recently announced that the tariffs announced in April will be implemented from August 1, against countries who failed to sign a deal, the report expresses doubt and suggests that there could be a further extension of the deadline due to the slow pace of the negotiations.

The SBI report also pointed out that many countries are still focused on maintaining stable trade relations with China, which is making it difficult for the US to push forward its tariff plans.

Despite US efforts, China remains a key player in global trade and is largely not part of new trade agreements being formed.

Among the US's trade partners, India, Vietnam, and Japan are in a better position to finalize trade deals. India, in particular, is actively working to reduce tariffs and is one of the few nations showing interest in investing in US sectors like semiconductors and shipbuilding.

For India, the trade relationship with the US is especially important, as the US now accounts for 20 per cent of India's total exports.

The report also outlined that any agreement between the two countries would be critical for future growth and stability.

- ANI