Trump's Tariff Game: Will It Work or Fail?

This week, President Donald Trump imposed a hefty 50% tariff on imports from India, alleging that India is financing Russia's war against Ukraine through its ongoing oil purchases from Russia.

- ANSHU JOSHI

This unexpected escalation, announced through an executive order, led to a strong backlash from India. The Indian government has labelled the decision as "unfair, unjustified, and unreasonable," with Indian PM promising to safeguard national interests.

While Trump cites India's oil purchases from Russia as justification, he may be using these elevated tariffs to negotiate trade concessions, especially in agriculture, dairy, and pharmaceuticals sectors that India has always protected. Though the US and India established a robust strategic partnership during Trump's initial term, which persisted through Biden's administration, that foundation is now under threat.

Trump's imposition of such a hefty tariff on Indian imports has also reverberated throughout the Indo-Pacific, not only due to its economic ramifications but also because it jeopardizes the integrity of the QUAD, the four-nation alliance comprising the US, India, Japan, and Australia, which was formed to counter China's expanding influence in the region.

After Trump's announcement, Indian PM delivered a defiant address at a public conference in New Delhi. The statement was clearly directed at Trump's tariff demands and highlighted the politically sensitive nature of concessions regarding agriculture and dairy in India. PM Modi has unequivocally stated that India will not compromise on its national interests or the welfare of farmers, fishermen, and the dairy sector. He also expressed his willingness to 'pay a personal price for the same,' possibly alluding to his relationship with Trump and the political challenges he may face domestically.