Trump's Tariff Threat Tests India-US Relations
frontline.thehindu.com -- Saturday, August 16, 2025, 9:58:50 AM Eastern Daylight Time
Categories: U.S.–China Relations, Economic Policy & Jobs, Trade Policy & Tariffs
There is a distinct souring of sentiment in the narrative across India's 24-hour news channels. A news anchor opens her piece with a sarcastic diatribe on how, if only Trump were president of the USA in the past, so much could have been avoided through history; the First World War, the Second World War, all of it. The screen behind her displays an image of the US president with the text "Earth is spinning better, thank Trump!". The title of this video op-ed piece is "Why Trump Should Never Win the Nobel Peace Prize".
It is a marked departure from the rapturous reception a second Trump term got only nine months back. A statement released then by India's External Affairs Ministry described how the two leaders had reaffirmed their commitment to a mutually beneficial and trusted partnership and agreed to remain in touch and meet soon. Social media and news coverage were awash with praise both for this sweeping victory and the warm and cordial relations between Mr Trump and Mr Modi.
President Trump's decision and threat to now impose a 50 per cent tariff by the end of August because of India's purchase of Russian oil has escalated a stand-off over trade and led to a spiral of news flow; the US will regret treating India this way, warns one piece; US-India relations are at their worst, bemoans another. The social media clarion has sounded -- it is time to ditch American products and companies like McDonald's, Coca-Cola, Amazon; although how exactly that will be done remains unclear. All this unfolding while a fresh deadline to this hefty tariff clocks down. So much has changed in nine months.
India has for now been steely in its response; but both choices present hard outcomes.
Global commodity data shows India imported about 1.8 million barrels per day of Russian crude in the first half of the year, which is about 37 per cent of its total imports. Since 2023, India has been the biggest market for Russian crude, and between the two largest buyers of Russian crude, India and China, it is India that is clearly more dependent. According to data and analytics company Kpler, India imported 89 million tonnes (seaborne crude) last year, which was more than China's import. Switching crude oil varieties and buyers is neither going to be easy nor practical for India's refineries, aside from the fact that it also threatens to ratchet up prices.
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On the flip side, the collateral damage of a 50 per cent tariff slap will be large. There are a number of export-oriented industries that are already feeling jittery; textiles, for one, the gems and jewellery sector, another, where the US makes up 30 per cent of its exports. Many export-oriented industries are in fact also labour-intensive industries, and a hit to their fortunes will have a massive knock-on effect on jobs. The list of vulnerable companies includes the big gun, Reliance Industries, which signed a 10-year contract to buy nearly 5,00,000 barrels a day of crude from Russia's state-owned Rosneft, making it the biggest-ever energy agreement between the two nations. Reliance has been exporting its refined products to both Europe and North America. A breakdown in ties with Western countries will mean significant changes in its business and perhaps its profitability in the months to come.
India's domestic advantage with a large consumer market has been pointed to, but whichever way you cut it, a tariff hike of this quantum will see economic damage and dented investor sentiment for the country.
There are counter-arguments to the possibility of a grim reset in Indo-US ties. One, that this will be yet another flip-flop by the US President, where a resolution of some sort will be cobbled together before the end of August, which is the deadline set by him. Two, that the two countries are now intertwined across too human and financial capital strands; Indian tech firms have long been present in America's industry through its services and its engineers. Money now flows both ways through venture capital and significant equity market exposure. Ripping all that apart will take more than tariff sabre-rattling.
All or some of this may prove to be true. But there are also two clear questions here that need to be reckoned with.
India was used to being the "pick me" candidate when it came to China, where there was tactical and strategic advantage in building strong relations with India to offset China's growing strength in the region. Many nations, the US included, are having a rethink about that approach. China is no longer taboo, and India is no longer the counterfoil to China's regional dominance. Worse yet is the distinct turn in relations between the US and India's other neighbour, Pakistan. What started with a rather embarrassing display of cornering credit, President Trump claimed he was the one to put a stop to an imminent war between India and Pakistan -- a claim that has been consistently repeated while speaking on the subject. While Indian diplomatic channels frantically tried to belie that take, Pakistan not only concurred with the US President's statement, it went on to nominate Donald Trump for the Nobel Peace Prize. Relations between the US and Pakistan have been on the upswing since then, ranging from private lunches with Pakistan's top military brass and talks about potentially boosting trade and commercial ties. It has left the Indian government with egg on its face and a disgruntled domestic mood. India and Pakistan, to America's mind are now firmly re-hyphenated.
Also Read | Modi's foreign policy in shreds as non-alignment becomes multi-alignment
How did it all turn sour so quickly when the singular narrative so far has been Prime Minister Modi's outstanding personal equation with Trump -- from walking out hand in hand to address a rally in Houston, Texas a few years ago, to what is now being termed the lowest point in Indo-US ties in many decades; the "great friendship" has not yielded any joy on economic ties. Perhaps the first lesson then is when policies -- foreign, national, or economic -- are built around personalities rather than nations, egos tend to get in the way. Especially when there is a domestic fan base that has been cheering the "strongman" approach to cater to.
There is also a view that this could be the moment India dives into structural reforms. In other words, this will be the catalyst for the great reset. As we wait on that outcome to emerge, it gives rise to the second question: Was that not the plan with the "Make in India" campaign launched a decade ago? What has gone so sorely wrong ten years into its launch, where is the performance audit on the promised nation-building initiatives, the manufacturing thrust, more jobs for more people?
This present round of tariff threats and ultimatums could go in any direction. Frankly, it does not even matter. The economic ground is shifting beneath the feet of both leaders. Time to see who has feet of clay.
Mitali Mukherjee is the Director of the Reuters Institute for the Study of Journalism, University of Oxford. She is a political economy journalist with more than two decades of experience in TV, print and digital journalism. Mitali has co-founded two start-ups that focussed on civil society and financial literacy and her key areas of interest are gender and climate change.
Featured Comment
Sign Our PetitionThe current tensions between the United States and India, as highlighted by President Trump’s proposed tariff threats, reflect a deepening complexity in international relations that resonates with broader historical patterns of economic coercion and geopolitical maneuvering. The article illustrates how swiftly evolving political climates can alter alliances, previously characterized by mutual benefit and cooperative rhetoric. The sharp pivot from a celebratory relationship to a potential trade conflict is not merely a reflection of Trump's impulsive leadership style but also a manifestation of systemic issues within global trade policies that disproportionately affect vulnerable economies and marginalized communities.
Historically, the dynamics of trade between powerful nations and developing countries often revolve around inequitable structures that favor the former. The U.S.'s imposition of tariffs serves as a reminder of the colonial legacies of economic domination that continue to permeate international relations. The irony of Trump's tariffs, especially in the context of his previous warm exchanges with Prime Minister Modi, underscores a larger narrative of betrayal experienced by nations that find themselves dependent on the goodwill of more powerful states. This situation is reminiscent of the post-colonial struggles faced by nations emerging from decades of exploitation, where reliance on foreign markets for commodities can lead to vulnerability in negotiations. The ongoing crisis invites reflection on the need for equitable trade agreements that prioritize human rights and labor standards over profit margins and political leverage.
The consequences of Trump's tariff threats extend beyond the immediate trade relationship; they carry profound implications for India’s domestic economy and social fabric. The sectors that are most vulnerable, such as textiles and handicrafts, are often comprised of labor-intensive industries that employ a significant portion of India's working class, including women and marginalized communities. The potential job losses resulting from these tariffs highlight an ongoing struggle for economic justice within India, where a substantial segment of the population remains at the mercy of global market fluctuations. When discussing these issues with others, it is crucial to emphasize how economic decisions made in distant boardrooms can have immediate and devastating effects on the lives of ordinary people, thereby pushing the conversation toward a more empathetic understanding of the interconnectedness of our global economy.
Furthermore, the backlash from Indian media and social commentators, as reflected in the article, indicates a growing nationalist sentiment that could have long-term ramifications for U.S.-India relations. The call to boycott American products can be seen as a reactionary movement, yet it also encapsulates a larger frustration with economic imperialism and the pressures of global capitalism. This sentiment is not unique to India; it mirrors rising protectionist attitudes globally, where countries are increasingly questioning the benefits of globalization that have historically favored wealthier nations. Engaging in discussions about these themes can provide critical insights into how the rhetoric of nationalism often masks deeper economic grievances and can be harnessed to advocate for fair trade practices that prioritize equity over exploitation.
Lastly, the ongoing situation between the U.S. and India could serve as a flashpoint for broader discussions on the need for a re-evaluation of international trade policies. Instead of leveraging tariffs as instruments of punishment, nations must engage in dialogues that promote alternative models of cooperation based on mutual respect, sustainability, and social justice. This could include advocating for trade agreements that explicitly support labor rights, environmental protections, and the well-being of marginalized communities. By framing current events within the context of these historical and social struggles, it becomes possible to challenge right-wing narratives that prioritize corporate interests over human welfare, while simultaneously fostering a global movement toward a more equitable economic future.
In conclusion, the escalating trade tensions between the U.S. and India reveal significant lessons about the fragility of international alliances and the precarious nature of economies reliant on foreign markets. As this situation unfolds, it is essential to keep the conversation focused on the underlying structures of inequality that define these relationships, pushing for a more just and equitable global economic system. Engaging with these themes not only provides a robust framework for understanding current events but also empowers individuals to advocate for systemic change that uplifts the most vulnerable among us.
The recent escalation of tensions between the United States and India, particularly in light of President Trump's proposed tariffs, offers a striking lens through which to examine the intricacies of global trade, national sovereignty, and the interconnectedness of economies. The narrative shift in India from one of optimism about a burgeoning partnership with the U.S. to a more adversarial stance underscores the fragility of international relations, especially when they are predicated on the whims of individual leaders rather than on the principles of mutual benefit and respect. The current situation serves as a reminder of the complexities of geopolitical alliances and the potential consequences of unilateral actions driven by domestic political agendas.
Historically, U.S.-India relations have undergone significant transformations, particularly since the end of the Cold War. The liberalization of the Indian economy in the 1990s, coupled with a shared democratic ethos, laid the groundwork for a closer partnership. Yet, this alliance has often been tested by contrasting national interests. The latest tariff threat illustrates how quickly diplomatic goodwill can erode when economic pressures and national policies clash. As President Trump prioritizes an "America First" approach, it is essential to recognize how this strategy can undermine longstanding partnerships and provoke retaliatory responses that may ultimately be detrimental to American interests as well.
For American citizens and policymakers, this situation presents a crucial opportunity to advocate for a more nuanced understanding of international trade relations. Engaging in discussions about the implications of tariffs—especially on labor-intensive industries—can help highlight the interconnectedness of global economies. As many American firms rely on Indian markets for textiles and other goods, an understanding of the ripple effects of such tariffs can foster a more compassionate and strategic approach to trade policy. Americans can also advocate for multilateral negotiations that prioritize equitable trade agreements, rather than resorting to punitive measures that favor short-term political gains over long-term economic stability.
Moreover, the social media backlash in India calling for a boycott of American brands highlights the power of consumer choices in shaping international relations. Americans can leverage this moment to discuss the ethics of consumption and the importance of supporting companies that prioritize fair labor practices and sustainable sourcing. By promoting awareness around which corporations engage in exploitative practices, consumers can influence corporate behaviors and policies. This can lead to a broader movement advocating for ethical trade practices that benefit workers both domestically and internationally, challenging the notion that economic competition must come at the expense of fairness and justice.
Educational initiatives that promote understanding of global trade dynamics are also vital in this context. Community discussions, forums, and workshops can empower individuals to become informed advocates for just trade policies. Schools and universities have a role to play in educating students about the realities of globalization, the impact of tariffs on labor markets, and the ethical considerations in international trade. By fostering critical thinking and civic engagement, a generation of informed citizens can challenge the status quo and demand that leaders prioritize diplomacy and collaboration over isolationism and confrontation.
In conclusion, the current tensions between the U.S. and India serve as a microcosm of larger issues within global trade and international relations. By understanding the historical context, advocating for fair trade practices, promoting ethical consumption, and fostering educational initiatives, Americans can engage thoughtfully in the discourse surrounding these issues. This engagement not only serves to inform our own policies but also cultivates a spirit of global solidarity—one that recognizes our shared humanity and the vital importance of cooperation in addressing the challenges that transcend national borders.
The article highlights the complex and deteriorating relationship between India and the United States, primarily fueled by President Trump's proposed tariffs on Indian imports due to India's purchase of Russian oil. This situation has far-reaching implications for both nations, especially in terms of economic stability and job security in India. Here’s a detailed analysis of what we can personally do in response to this development, along with actionable steps:
### Personal Actions We Can Take
1. **Educate Yourself and Others**: - Stay informed about international relations, trade policies, and their implications on local economies. Share this knowledge with your community through discussions, social media, and local events.
2. **Support Local Economies**: - Look for local products and businesses that might be affected by tariffs. Consider spending your money in ways that support local jobs and industries.
3. **Advocate for Fair Trade Policies**: - Engage in conversations about fair trade and the importance of international cooperation rather than conflict. Promote policies that prioritize workers’ rights and sustainable practices.
4. **Boycott Specific Brands**: - If you feel strongly about the tariff situation, consider participating in or organizing a boycott of American companies that are likely to be involved in trade disputes or that you feel are unfairly benefiting from the situation.
### Specific Actions to Take
1. **Sign Petitions**: - Look for petitions that call for fair trade practices, reduced tariffs, and protection for labor rights. Websites like Change.org and MoveOn.org often have active petitions related to these issues. 2. **Write to Elected Officials**: - Reach out to your representatives to express your concerns regarding the tariffs and their impact on jobs. - **Example**: - **Senator Elizabeth Warren** - Email: https://www.warren.senate.gov/contact - Office Address: 2400 JFK Federal Building, 15 Sudbury Street, Boston, MA 02203 - **Representative Alexandria Ocasio-Cortez** - Email: https://ocasio-cortez.house.gov/contact - Office Address: 144 E 126th St, New York, NY 10035
3. **Engage with Advocacy Groups**: - Connect with organizations that work on international trade issues, labor rights, and economic justice. These groups often have campaigns that you can support. - **Example**: - **Public Citizen** – They often have actions related to trade policy. Visit their website for more information.
4. **Participate in Local Discussions**: - Attend town hall meetings or community forums to discuss the implications of trade policies and how they affect local economies. - Organize a local meet-up or discussion group focused on international relations and trade, inviting speakers from local universities or activist organizations.
5. **Utilize Social Media**: - Use platforms like Twitter, Facebook, and Instagram to raise awareness about the implications of tariffs and trade policies. Share informative articles, infographics, and personal stories that highlight the human impact of these policies.
### What to Say
When reaching out to elected officials or engaging with your community, consider using the following points:
- **Express Concern**: “I am deeply concerned about the proposed tariffs on India, as they could lead to significant job losses in labor-intensive industries and negatively impact the economy.” - **Advocate for Fair Trade**: “It’s crucial that our trade policies focus on collaboration and benefit both nations, rather than creating unnecessary conflict that harms workers and families.”
- **Call for Action**: “I urge you to advocate for fair trade practices that protect jobs and promote sustainable partnerships with other countries, rather than punitive measures that could escalate tensions.”
By taking these actions, you can contribute to a broader movement advocating for fair trade policies and strengthening international partnerships based on mutual respect and cooperation.