Former U.S. President Donald Trump has been the most vociferous in condemning the trade relationship between the U.S. and India. He denounced it as “a completely lopsided catastrophe! His comments come at a time of great pressure on U.S.-India relations. These strains have deepened, particularly in the wake of India’s attendance at a recent summit that included China.
The basis for Trump’s criticism lies in the tariffs each country levies. India has been pushing for a “zero-for-zero” tariff agreement on those key exports, which include steel, auto components and pharmaceuticals. At the same time, the U.S. has slapped large tariffs on Indian imports. At present, U.S. tariffs on India amount to as high as 50%, added on by secondary duties of 25% for India’s import of Russian oil. Trump continues to claim that these measures are necessary. He makes the case that India’s tariffs on U.S. exports are the highest in the world.
India’s response has been equally as strong, calling the U.S. tariffs “unfair, unjustified and unreasonable.” India’s foreign ministry emphasizes a major contradiction. Even countries denouncing India’s neutrality while themselves continuing trade with Russia show us that we need a more nuanced understanding of international trade dynamics today.
The rift in U.S.-Indian relations has especially come into focus over the last few months. The unsuccessful negotiation of a trade deal has heightened tensions and sparked Trump’s decision to impose tariffs on Indian exports. On the other hand, India still exports “huge volumes of merchandise” to the U.S., creating a confusing dichotomy in their growing economic relationship.
The joint statement at the recent SCO summit between India and China delivered an important signal. More than anything, it highlighted the need for collaboration over competition. The leaders made a joint declaration of intent to deepen this partnership, which would seem almost unbelievable compared to the current tenor of U.S.-India relations.
Marko Papic, chief strategist at GeoMacro Strategy BCA Access, has noted that improving relations with India is significant for both nations. He stated, “The improvement of relations with India is a big deal. It allows India to access highly critical intellectual property that it needs if it is to industrialize and boost manufacturing.”
Papic worried about long-term consequences of a fracturing geopolitical order. “But, over the long term, the U.S. is losing the propaganda battle to paint China as the trouble-maker-in-chief,” he warned. “And that only further ossifies multipolarity.”