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India's playbook for US trade deal: Engage, but don't kneel
As the new deadline for reciprocal tariffs looms large, US President Donald Trump on Wednesday said that the US and India are very close to finalising a trade deal, as high-level talks between the two sides continue. Both sides have sounded optimistic about the deal and signalled a potential breakthrough. But India must proceed with extreme caution while negotiating with the United States.
The story behind Trump's tariff letters—sent to over 20 countries but conspicuously absent for India—reveals a troubling truth. These are not invitations to negotiate; they are ultimatums designed to bend nations to America's will. Trump's tariff strategy is less about trade and more about geopolitical blackmail.
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President Donald Trump cranked up the pressure on nations like Japan, South Korea, and Indonesia by sending them the tariff letters. Penned in Trump's signature style—blunt warnings and a 'take it or leave it' tone—they outline steep import duties, some as high as 40 per cent, set to take effect on August 1, 2025. Trump's deal with Indonesia, which slashed tariffs from a threatened 32 per cent to 19 per cent, is touted as a victory, but it came only after Jakarta agreed to buy $15 billion in American energy and 50 Boeing jets. India, notably, has not received such a letter, a fact that speaks volumes about its strategic manoeuvring. Trump's approach is not negotiation but coercion, a high-stakes gamble that risks alienating allies and destabilising global trade.
The problem lies in the mechanics of Trump's strategy. These letters are not opening bids in a good-faith dialogue; they are orders. To Japan, Trump wrote, 'Starting on August 1, 2025, we will charge Japan a tariff of only 25 per cent,' as if the rate were a favour. The subtext is unmistakable: comply or face economic punishment. This is not the art of the deal but the art of the shakedown.
For countries like Brazil, slapped with a 50 per cent tariff, the message feels personal—it was slapped due to former Brazilian President Jair Bolsonaro's legal troubles. It indicates political grievance diplomacy. The approach upends decades of trade diplomacy, which, for all its flaws, relied on mutual concessions and predictable rules. Trump's tariffs, by contrast, thrive on unpredictability, weaponising uncertainty to extract concessions.
India's absence from the tariff letter roster is no accident. New Delhi has played a shrewd game, engaging Washington without bowing to its deadlines. Indian officials, led by Commerce Minister Piyush Goyal, have insisted on a deal that serves national interests, not one dictated by Trump's timetable. This defiance is rooted in pragmatism. India, one of the major suppliers of generic drugs to the United States, faces a looming threat of 200 per cent tariffs on pharmaceuticals. Yet, by holding firm and diversifying export markets—potentially to Asian nations hit harder by US tariffs—India has carved out leverage. This is a calculated refusal to be bullied.
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The US must return to principled trade negotiations. Tariffs can be a tool, but they should be precise, not scattershot. Trump's unilateralism invites retaliation—retaliatory tariffs against the US in the name of safeguard measures if pushed. Allies like India should be treated as partners, not pawns. A trade deal with New Delhi, focused on sectors like pharmaceuticals and digital commerce, could yield mutual gains without the need for public ultimatums. Finally, global leaders must come together to resist coercive tactics, forming coalitions to counterbalance Trump's economic threats and taunts.
Trump's supporters argue his approach gets results. The Indonesia deal, they say, proves tariffs can help open markets and boost American exports. There's truth here: the threat of high tariffs did push Jakarta to the table. And India's ongoing talks suggest Trump's pressure has accelerated negotiations. But the cost—strained alliances, disrupted supply chains, and higher consumer prices—may outweigh the benefits. A trade war with no winners is a poor legacy.
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India's defiance offers a blueprint for navigating Trump's tariff storm. By refusing to be rushed and diversifying its trade horizons, New Delhi shows that strength lies in patience and strategy, not submission. The world is watching. Nations facing Trump's letters would do well to study India's playbook: engage, but don't kneel. For the United States, the lesson is simpler: true leadership persuades, not bullies. As August 1 looms, the global economy hangs in the balance. It's time for diplomacy, not diktats.
The writer is a columnist. His articles have appeared in various publications like The Independent, The Globe and Mail, South China Morning Post, The Straits Times, etc. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost's views.
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