The disclosure of President Trump’s implementation of comprehensive tariffs against India, amounting to 50%, shatters the facade of a hearty coalitional relationship between the U.S. and India. The severity of these tariffs is a clear indication of an increasingly confrontational trade dispute. Trump’s rationalization for this course of action lies in India’s persistent importation of low-cost Russian oil, arguing that this bolsters Russia’s military pursuits and generates profits for India through the resale of refined Russian oil. Consequently, Trump’s actions seem to be driving the two countries toward a clash of trade policies.
In defiance, India signaled a possibility of counteractions. Despite India’s response, Trump remains resolute and plans to impose the initial 25% tariffs this week and the remaining 25% later in the month. This stringent tariff plan is one of the most aggressive ever placed against a significant trading ally, more shockingly towards a nation deemed by Washington as a critical ally.
India, in theory, is an ideal ally for the U.S. — it is the world’s most populous democracy with widespread English fluency and interconnectivity with the U.S. economy. The trades of goods and services between the two nations reached an all-time high of $212 billion in 2024, resulting in a U.S. trade deficit of roughly $46 billion. Being an established manufacturing hub in pharmaceuticals, apparel, and technology to the U.S., India is a valued trade partner.
However, India’s perception of this relationship largely lacks sentimental considerations. Since the Cold War, India has consistently upheld a policy of non-alignment that evolved into strategic autonomy. It actively engages in U.S.-led forums without expressing the necessity for formal allegiance. India also holds memberships in the BRICS and the Shanghai Cooperation Organization, reflecting its diversified affiliations.
Throughout the years, India has maintained diplomatic relations and engaged in various arms deals with several countries worldwide, intentionally opting out of any measures of boycott. Russia has always been a valued defense partner and a significant energy provider to India, creating a fairly complex network of global relations.
India is at the forefront of Russian oil imports, importing over one-third of its oil requirements from Russia – this amounts to over $50 billion per year, a significant rise since 2021. India’s extensive use of discounted Russian oil and its role as the leading importer of Russian crude outpaces its other contenders. Some of this oil is refined further by India and re-exported to Western markets, taking advantage of a loophole in sanctions.
This strategy provides India with an essential reason to oppose any sanctions against Russia for its actions in Ukraine. The statistics speak for themselves – India currently imports more than a third of its oil needs from Russia, a yearly transaction valued at over $50 billion, and this high demand has been the trend since 2021.
This underlying connection has heavily influenced recent events. As Trump grows skeptical of Putin’s intentions to resolve the Ukraine conflict, the frustration with India is quickly escalating. The U.S. anticipates India’s supportive role in counterbalancing China’s growing influence and ensuring global supply chain security.
However, the U.S.’s decision to impose new tariffs as a geopolitical sanction is quite an anomaly. While tariffs are traditionally used to bolster local industries, deploying them to achieve foreign policy objectives is a divergence from the norm. While this might seem irrational, it’s not entirely bereft of rationale – tariffs are an efficient policy tool that presidents can autonomously execute.
But, the enforcement against India underscores the potential downside of this strategy. India, given its vast population, robust economy, and steady economic growth, is not likely to give in to such pressure tactics. The tactic also exposes the U.S. to claims of duplicity as other nations also engage in trade with Russia across diverse commodities.
The potential harm to U.S. consumers is substantial, with tariffs likely leading to price increases, especially in sectors like generic medication and clothing that heavily rely on imports from India. The tariffs further threaten to disrupt shifts in supply chains, with firms that have relocated production to India now facing the threat of heavy duties. The possibility of India retaliating with penalties on U.S. exports also looms.
Despite the current strain in the U.S.-India relationship, the relationship is fundamentally a commercial one. The U.S. is interested in India’s assistance in checking China’s influence and securing global supply chains, while India is keen on securing access to technology, markets, and investments. Hence, cooperative initiatives such as diverse technological partnerships may well thrive.
The current developments might lead to a perception of India not as a principal partner but an entity that could be persuaded as per the dynamic demands. These implied assumptions could explain why trade discussions frequently hit a roadblock due to disagreements over tariffs and market access.
India has a stronghold on agricultural import barriers and resists alignment with external regulations. While the U.S. views this as a protectionist move, India interprets it as an attempt to impose imperialistic demands. Both narratives have their unique perspectives and are not entirely unjustified.
India’s foreign policy is discerning, practical, occasionally assertive, and unapologetically self-centered. Trump’s tariffs might cause discomfort, but they are unlikely to reorient this ingrained disposition. The challenge lies in dispensing with the narrative that India is a sentimental democratic ally.
If both nations ultimately acknowledge that their relationship is not founded on shared ideologies, but rather intertwined interests, a genuine partnership still stands a chance. Despite the US’s roughest of tariffs, if both parties can find a common ground based on shared economic objectives, this will be the key towards a fruitful partnership.
The post Trump’s Tariffs: A New Low in U.S.-India Relations appeared first on Real News Now.
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