Why oil and gas could help India blunt Trump’s mutual tariffs

India’s Prime Minister arrives at the White House this afternoon with tariffs an inevitable top-of-in-the-agenda, but other issues in the game have the potential to avert some new tasks between the world’s first and fifth largest economies.

The most prominent topic that can help India blunt Trump’s new tariffs is perhaps energy. Narendra Modi oversees an economy that is an important recipient of US oil and gas exports, and it is clear that changes on this front may be on the table depending on how the tariff goes.

“Trump has made it very clear that he considers a lot of these things transactionally,” said Shayak Sengupa, who leads the India program at Columbia University’s Center for Global Energy Policy.

India also has a prolonged personal connection between Trump and Modi, working in its advantage, adding Sengupa, noting that the country “has not approached this Trump Presidency with as much nervousness as, for example, the European Union.”

Modi has also already begun discussing cutting some tariffs on more symbolic American goods such as Harley-Davidson motorcycles ahead of this week’s visit.

But if Trump is willing to overlook the deep trade deficit, seeing where the president is also ready to establish his plans for mutual tariffs today before Modi arrives at the White House at. 16 et.

Trump preview of these tasks Thursday morning, writing“Today is the big one: mutual tariffs !!!”

Negotiations between Trump and Modi continue through dinner, and a number of additional trading questions will be on the table.

Read more: What are tariffs and how do they affect you?

A 27th of January call between Modi and Trump also included a conversation that India bought more US-made security equipment as part of “moving toward a fair bilateral trading relationship”, ” According to a summary in the White House.

Another keen question between the two countries that experts expect could be non-duty trafficking barriers, which the United States is able to implement more effectively using regulatory capacity or just the money to subsidize affected industries.

Trade deficit between US and India has quickly been expanded and recently peaked $ 45 billionWith India, which also charges some of the highest tariffs in the world.

Both facts have long ranked Trump and his helpers.

“The world has benefited from the United States for many years,” he said Wednesday. “We want to make mutual tariffs, which is what they charge, we charge very simply.”

The story goes on

But it is unlikely that it is so simple in India’s case. The nation imports energy from the United States and depends on various other sources of oil and natural gas to operate its economy, with President Trump also very interested in increasing US energy exports.

India is currently importing significant energy from Russia at a cheaper price than US energy, but the increased cost of a kind of uptick in the US energy gate could – from India’s perspective – be more than offset by avoiding new Trump Tariffs.

And energy has already proven to be a problem that can move Trump.

In just a few weeks ago, the White House added one last minute cut to lower tasks on Canadian energy in back and forth with this country.

And promises from Japan’s Prime Minister Shigeru Ishiba, to import more fluid natural gas, Trump helped demand victory there during a recent visit to the White House.

Modi is also likely to make a case on Thursday afternoon that trade barriers that the United States does not use must also be considered.

“It’s hard to use all the non-customs protectionism that the United States employs in terms of money and resources and just administrative capabilities and the rest,” Scott Lincicome of the Cato Institute said in a recent interview.

It has long been an avid question for countries like India that say to focus simply on customs rates alone miss out on the overall picture.

But Lincicome noticed that it could come face to face with Trump, who “isn’t interested in any of it and just just wants to go for duty.”

In the end, many expect a trade agreement to be possible, perhaps the question of whether it will be one that will change the trade landscape significantly between the two nations.

Professor Sengupa notes that previous offers – including some with Trump – have been beaten with fanfare and promises of increased purchase of different items, but then down the line “I suppose you will not see so much of a movement in terms of deficit , trade surplus or the measurement you want to look at.

Correction: An earlier version of this story had a wrong context for the trade deficit between the US and India. That’s over $ 45 billion.

Ben Werschkul is the Washington correspondent for Yahoo Finance.

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