Trump’s Tariff Escalation and India’s Defiance | The American Spectator

President Trump’s announcement of 50 percent tariffs on Indian imports has exacerbated the friction between the two countries. This increase in tariffs is a continuation of the previous 25 percent tariffs on Indian products on account of India’s exorbitant tariffs, as well as the procurement of Russian oil and weapons. President Trump repeatedly alleged India’s procurement of Russian oil to be assisting the latter in its war against Ukraine — a conflict President Trump is diligently pushing towards conclusion. However, in response to these tariffs, India has not imposed retaliatory tariffs, revealing its economic vulnerabilities and lacking strategic leverage.

India’s average import tariff on U.S. goods is around 7.7 percent. However, tariffs on agricultural products are significantly higher, with an average of 39 percent, and some products have an enormously high rate of 100 to 150 percent, such as alcohol. Additionally, last December, Indian Foreign Minister S. Jaishankar expressed his opinion on buying Russian oil, inferring that India buys Russian oil because that is the best deal on the table for the nation. This situation indicates a widening rift between the U.S. and India, as the Trump administration appears displeased by India’s high tariffs and its uneven inclination toward Russia.

India’s economy greatly depends on foreign investment, and the enforcement of tariffs by the Trump administration is already hampering Indian economic growth. The U.S. is the largest trading partner of India, as Indian exports to the U.S. amount to a staggering $79.4 billion. However, in the face of Trump’s new 50 percent tariffs, India lacks the capacity for firm resistance because it does not possess the economic prowess of China, including an expanded export market, a dominant position in the global supply chain, and an unyielding monopoly over semiconductors and rare earth minerals. All of this helped China fight off the massive 145 percent U.S. tariffs on Chinese goods. (RELATED: The US Rediscovers a Valuable Trading Partner — Indonesia)

India’s heavy reliance on Western, specifically American, investment leaves little room for Indian policymakers to wiggle. With the recent directives of President Trump to the CEO of Apple, Tim Cook, to halt production in India, the challenges for the Indian IT industry intensify, envisaging a diminution in India’s IT exports. Similarly, Trump further prompted tech giants, including the likes of Microsoft and Google, to stop hiring from India and instead incentivize American hires. In such a landscape where foreign investment is being tightened and multinational corporations are being deterred from pursuing Indian talent, India possesses a minuscule margin to challenge Trump’s tariffs with retaliatory tariffs. (RELATED: Trump on Tariffs, Trade, and Pragmatic Populism)

The geopolitical limitation also constrains India’s policy choices. India’s border confrontations and strategic divergences with China restrict the prospects of amelioration of economic ties with China. India had previously imposed a ban on several Chinese software and mobile apps, citing security reasons. Meanwhile, China has also imposed restrictions on the export of rare earth minerals to India, further creating impediments for the Indian manufacturing sector. This mistrust had prevented India from pursuing Chinese investment and market as an alternative to the U.S.

In the wake of U.S. tariffs, India has attempted to reconcile with China — hoping to regain Chinese goodwill. Chinese Foreign Minister Wang Yi visited India on August 18, which Indian political commentators hailed as a revamping of relations between the two countries. The upcoming visit of Indian PM Narendra Modi is also being predicted to melt the ice between the two countries. Amid these visits, news regarding annulment of the ban on Chinese apps, including TikTok, is surfacing in the Indian media, which hints at the Indian desire to cozy up to China and seek an alternative to U.S. dependency. These attempts, however, cannot instantly mitigate decades of mistrust, strategic divergence, and border disputes. (RELATED: Trump’s Intel Holding: Will It Help US Defeat China, Inc.?)

India cannot escape the geostrategic realities that placed it in the U.S. camp, especially after the end of the Cold War. India is part of the QUAD alliance, which was formed by the U.S. to contain China. However, India is also a founding member of the BRICS group, which apparently aims to supersede the hegemony of the American dollar with a common BRICS currency. President Trump has repeatedly expressed his resentment with these attempts and has warned India against being part of such actions. (RELATED: BRICS Summit: Underwhelming and Cautious)

India’s recent attempts at rapprochement with China will raise eyebrows in Washington, D.C. The U.S., over the last few decades, has viewed India as a counter to China’s growing power in the region. Its hasty attempts at harmonizing relations with China are solely aggravating Trump’s indignation, as exhibited by the upsurge of tariffs from 25 percent to 50 percent. India, in an attempt to seek alternatives to the U.S., overlooked that it had an upturn in economic growth. Over the years, India relied heavily on U.S. support, instead of building regional strategic partnerships and strengthening its place at the podium. This diminishes India’s strategic leverage against the U.S., as it lacks regional trust and robust alliances.

Additionally, India has invited the Trump administration’s displeasure over its policy of continuing the procurement of Russian oil. Analysts report that India saved over $17 billion through the procurement of Russian oil. However, the 50 percent tariff in effect has projected a cut of Indian exports to the U.S. by $37 billion, eroding the dividends of Russian oil procurement. India’s fixation with buying Russian oil is further exposing its minuscule strategic leverage, given its multifaceted integration with the Western economy and overt reliance on U.S. investment as well as the U.S. market.

This inextricable interconnectedness with the U.S.-led neoliberal order cannot allow Prime Minister Modi and Foreign Minister Jaishankar’s policy to have strategic oars in two boats. India’s economic vulnerabilities and strategic weakness are exposed by Trump’s tariffs, and its status as the fourth-largest economy looms in uncertainty. The increased 50 percent tariffs will further add to India’s economic woes. The procurement of Russian oil and perceptible assistance to Russia in its offense against Ukraine goes directly against the interests of President Trump, who is bent upon ending the Russia–Ukraine war, possibly foreseeing a Nobel Prize. President Trump will capitalize on India’s economic and strategic limitations till his objectives are met.

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Hamza Zaman holds an M.Phil. degree in International Relations from Quaid-i-Azam University, Islamabad, Pakistan. He works as an assistant research associate at the Islamabad Policy Research Institute, Pakistan.

Muhammad Salman Tariq is an alumnus of the National Defense University, Islamabad, where he received a bachelor’s in Peace and Conflict Studies. He is an assistant research associate at the Islamabad Policy Research Institute, Pakistan.