Trade by Threat: How Trump turns deals into demands and forces compliance over cooperation, says GTRI

Trump’s Trade Strategy: US President Donald Trump has once again resorted to tariffs as a tool of pressure in trade negotiations. A Global Trade Research Initiative (GTRI) report says Trump is using tariffs not to build partnerships, but as a tool to force countries into compliance. According to GTRI, US President’s trade strategy is based on a tactic of pressure rather than cooperation, turning trade deals into unilateral coercive agreements.

The report said Trump’s approach avoids the rules of traditional free trade agreements (FTAs) that are based on reciprocal tariff reductions and mutual benefits. Instead, his strategy demands that partner countries reduce tariffs and commit to buying US goods, while the US makes no similar concessions in return. These deals are signed under pressure and lack fairness, GTRI noted.

GTRI said, “Trump’s trade strategy circumvents traditional Free Trade Agreements (FTAs), demanding tariff cuts and purchase commitments from partner countries without reciprocal U.S. concessions.”

One of the key points highlighted in the report is that no trade agreement under Trump provides long-term certainty. Even after signing an agreement, countries remain vulnerable to new tariff threats.

For example, President Trump recently threatened to impose 10 per cent tariffs on BRICS countries, including India, citing their “anti-American policies.” This shows the political and unpredictable nature of US trade actions under Trump.

India has already submitted its final trade proposal and is expected to reach an agreement with the US soon. However, the GTRI report warns that this agreement will not protect Indian exports from unilateral tariff hikes in the future.

The report says that even if an agreement is signed, a minimum 10 per cent additional duty may be imposed on Indian exports. This is because the 26 per cent surcharge imposed on Indian goods in April cannot be completely withdrawn.

“Even if a deal is struck, Indian exports may still face a minimum 10 per cent additional levy, making it a pressured compromise, not a true partnership,” GTRI stated.

The deadline for countries to sign trade deals has been extended by President Trump from July 8 to July 31. Following this, starting August 1, non-compliant countries may be subject to country-specific tariffs of up to 40 per cent. India is among the countries that have received formal tariff warning letters from the US administration.

The report also said that these new tariffs will be imposed in addition to the existing Most Favoured Nation (MFN) rates, but will not apply to sectors such as steel, aluminium, auto and auto parts, which are already being charged separate duties.

For example, in the case of Japan, the proposed tariffs on products such as pharmaceuticals, semiconductors, books, smartphones, energy and copper will remain at 0 percent. Meanwhile, tariffs on steel and aluminium will rise to 50 per cent, on autos and auto parts to 25 per cent, and on other products from 10 per cent to 25 per cent.

GTRI reported that Donald Trump does not have fast-track trade authority from Congress, which means he cannot legally reduce MFN tariffs. Instead, he is offering to roll back the “Liberation Day” tariffs he imposed in April using emergency powers.

However, a US federal court has already ruled these fees unlawful, and the case is currently under appeal, leaving the legal basis for these fees uncertain.

GTRI concluded that such agreements provide limited benefits, and leave the door open for future tariff action by the US, raising concerns about the long-term stability and fairness of these agreements.

With the inputs of ANI