Path to a Reset?

India and China share a complex relationship shaped by historical mistrust, border disputes, and strategic competition. The Galwan Valley clash in 2020 was a stark reminder of how volatile their bilateral ties can be. Yet, despite such tensions, trade between the two nations has not only persisted but thrived. China remains India's largest trading partner, though the balance is heavily skewed in China's favour

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The re-election of Donald Trump as the President of the United States has once again thrown global geopolitics into flux. Known for his unorthodox approach to foreign policy and international trade, Trump's return signals a potential reshaping of alliances and economic strategies across the world.

At the heart of this unfolding drama is his aggressive tariff policy, which could have significant implications not just for the U.S.-China relationship, but also for India-China ties.

President Trump has consistently pushed for a recalibration of the U.S. economy, with a central focus on reviving domestic manufacturing. His core support base – particularly in the so-called "Rust Belt" states – feels the pinch of de-industrialization, and Trump believes that high tariffs on imports can incentivize companies to bring manufacturing back to American soil.

In this vein, he has announced sweeping tariffs across the board, sparing few countries. While a temporary 90-day delay has been granted to most, China has been hit hard with a 224 per cent tariff.

Trump's reasoning is simple but consequential: reduce America's dependency on foreign goods and generate employment by rebuilding the domestic industrial base.

However, the ripple effects of this decision are being felt across the world. With the U.S. and China once again locked in a tariff war, there is growing speculation about whether this renewed tension might inadvertently open doors for greater economic engagement between India and China.

India and China share a complex relationship shaped by historical mistrust, border disputes, and strategic competition. The Galwan Valley clash in 2020 was a stark reminder of how volatile their bilateral ties can be. Yet, despite such tensions, trade between the two nations has not only persisted but thrived. China remains India's largest trading partner, though the balance is heavily skewed in China's favour.