'TACO' Routine, And Other Explanations For Trump's Great India Meltdown

NDTV

4 days ago

The ground beneath the India-US relations is shifting thick and fast. In light of the recently imposed 25% tariffs on India by the Trump administration, two contradictions now define the India-US bilateral relationship. Despite ongoing negotiations that had not yet broken down, the tariffs were unexpectedly introduced, signalling a discord between diplomatic momentum and policy action.
A Dual Challenge
Yet, confidence in the overall trajectory of the bilateral relationship appears to endure. India's response to the tariffs struck a measured tone, maintaining a willingness to continue negotiations while clearly delineating its red lines. Notably, the tariffs levied on India are steeper than those imposed on other Asian economies such as Indonesia, the Philippines, Vietnam, and Japan. What may be more troubling than the tariffs themselves is President Trump's invocation of India's energy ties with Russia. This suggests a broader strategic discomfort beyond trade. As the tariff negotiations evolve, India now faces a dual challenge in its relations with the United States: first, managing the domestic economic impact of higher US tariffs, and second, navigating the risk of secondary sanctions stemming from its relationship with Russia, particularly as the Russia-Ukraine conflict continues to unfold.
Saving Face?
On the trade front, perhaps the last word on a trade deal is yet to be said or written. As such, there is a good chance India and the US may continue negotiations to arrive at a better position. Meanwhile, the tariffs may continue. Trump's announcement comes against the backdrop of a series of frustrations both domestically and internationally. Trump had already pushed the initial deadline for the tariffs from July to August, and another extension would further entrench the belief in the 'TACO' - 'Trump Always Chickens Out' - theory. Technically, any extension beyond August 1 would have complicated Washington's other negotiations, most notably with China, which seemed to be progressing satisfactorily to both parties until now. Domestically, a hard posturing vis-à-vis large economies would sell well to douse the political fire in the Beltway due to the ongoing Epstein controversy.
Internationally, posturing against India - a strategic partner with which Trump associates himself closely - could usher in advantageous positions for Washington against Beijing, a more lucrative catch.
The Russia Embarrassment
The other international concern for Trump that he has little control over is the ongoing Russia-Ukraine war. Trump has tried all the tricks in the book - from isolating Ukraine to rebuking Russia - but has failed to bring Putin to the negotiating table, let alone stop the war. Slowly but steadily, the Russia question has crept up on Trump in the form of the Sanctioning Russia Act of 2025, which has been introduced in the US Congress. As Trump realises the difficulty in stopping the conflict, some of his frustrations could quickly spill over to economic measures used as levers to arm-twist other stakeholders.
India, for itself, may have realised the futility of entering a cycle of retaliation with Donald Trump and has consistently signalled a willingness for measured conciliation in select sectors in its trade negotiations with the US. Needless to say, giving a carte blanche market access to the world's largest economy, which positions itself quite differently on the levers driving its economy, may work to the detriment of a developing economy like India, where income gaps and wealth distribution remain significant challenges.
Tariffs For Everyone
As a growing number of countries fall in line with Trump's tariff tactics, a few trends emerge. From the perspective of a mercurial president who is hell-bent on striking deals on his own terms to restore trade balance for the American economy, Trump is rapidly normalising the practice of tariffing friends, partners and allies alike. Trump's pragmatic approach to relations with other countries takes a unitary view of how the US should gain economically, and functions regardless of the recipient countries' economic or political circumstances. As the largest economy in the world, it does have the privilege to make independent decisions, which imposes costs on others.
However, if Trump continues on this path, the new fundamentals imposed by his presidency may become structural to America's relations with other countries. While these steps will obviously shape a new economic order, they could very well change geopolitics - perhaps most worryingly in the Indo-Pacific.
Good (Not Really) Old Days
The timing of it all also furthers the somewhat rough patch in India-US relations that began with an exhilarated Trump rushing to claim credit for bringing India-Pakistan hostilities to an end post-Operation Sindoor. What followed was Trump's repeated attempts to reclaim the peace narrative, and, in that effort, re-hyphenate India and Pakistan. Needless to say, Trump's strategy has backfired, with India categorically rejecting any role of mediation by Trump consequentially important to the cessation of hostilities between India and Pakistan. Natural to Trump's style, he has moved to embrace Pakistan and seek economic benefits from Islamabad. As such, the announcement of a trade deal between the US and Pakistan, "expanding market access, attracting investment, and fostering cooperation in areas of mutual interest", and working together with Pakistan on developing oil reserves are developments that do not augur well for India-US relations.
The happenings of the past few months are rapidly circling back to the old days of America's proximity with Islamabad. Although riding on an economic logic, Trump's Pakistan embrace will not be without scrutiny in New Delhi.