What Trump is actually doing — and why India needs to press reform & reset

Indian Express

4 days ago

FOR all the disquiet in Delhi over US President Donald Trump's sugar-uncoated remarks, his rough and ready tactics on trade, there needs to be a sobering acknowledgment of two realities: one, like it or not, tough tactics often win on the street in a world that's never stopped being an unfair place; and, two, Trump has prevailed.
Most mainstream economists dismissed his approach, warning that his aggressive tariff regime would spell disaster for the US economy. Yet, four months after unveiling his first tariff chart on April 2—dubbed 'Liberation Day'— and his second on Friday, Trump has gained enough ground to claim a significant victory.
Like a gambler, who believes he is on a winning streak, Trump is set to roll the dice for far more sweeping changes in the post-war global financial and technological orders.
The US President's bilateral negotiations are being described as the 'Trump Round' of trade talks, echoing the major rounds of GATT and WTO negotiations that shaped global commercial order.
With the exception of Canada and China, most countries refrained from retaliatory tariffs. Instead, they lined up outside the White House, eager to strike deals before the extended August 1 deadline.
India was among the early partners to start trade talks but failed to close a deal. While many major economies and middle powers signed agreements on Trump's terms, India now finds itself in the company of Brazil, Burma, and Switzerland facing steep US tariffs.
To its credit, Delhi did recognise trade as central to Trump's second-term agenda. Prime Minister Narendra Modi's February 13 meeting with Trump produced a joint statement affirming the goal of expanding bilateral trade to $500 billion and launching time-bound trade negotiations.
India negotiated in good faith and continuously. But the gap between India's negotiating brief and Trump's maximalist agenda proved too wide to bridge.
Trump's growing impatience was evident in a barrage of tweets targeting India, while senior administration figures—Treasury Secretary Scott Bessent and Senator Marco Rubio—spoke publicly about the President's 'frustration' with Delhi's posture.
Frustration had also defined Trump's first-term trade engagement with India.
Robert Lighthizer, Trump's former US Trade Representative, recounts in his book, No Trade is Free, how difficult it was to conclude even a modest trade agreement with Delhi. He placed the blame not on India's bureaucracy, but on the entrenched interests of the Indian capitalists that fiercely guard the barriers protecting them from external competition.
Lighthizer revealed he kept files on top Indian tycoons—whom he labeled 'oligarchs'—to better understand Delhi's negotiating strategy. Trump's complaint about India's 'obnoxious' non-tariff barriers rings familiar. India's neighbours have long voiced similar grievances, although a lot more politely.
Yet, the deeper issue may be Delhi's underestimation of the scale and ambition of the Trump Round. Trump's goal was not merely a new bilateral deal here or there, but a systemic overhaul of the global trading order constructed after the Second World War and revamped at the turn of the millennium.
On the campaign trail and in office, Trump has argued that the international trade regime has failed the American people—and must be overturned.
The strategy, often dismissed as irrational, had a logic of its own. Stephen Miran, Trump's economic adviser, argued in a paper written before the presidential election that Washington could exploit the global export dependence on the US market—and allies' reliance on US security guarantees—to rewrite the rules.
Miran describes the post-war free-trade order as a political construct, in which US policy sacrificed domestic industry for Cold War geopolitical goals. He proposed replacing blanket multilateralism with 'strategic pluralism,' forging separate deals with different nations based on US leverage.
Before taking over at the Treasury, Bessent, too, hinted at the broader potential of tariffs—not just to reshape trade, but to pressure states on energy, currency, and strategic alignment. For Bessent, Trump's strategy was about a grand rebalancing of the global economy in America's favour.
Trump has not held back.
He has used tariffs for a variety of objectives. He imposed a 50% tariff on Brazil to weaken President Lula and help his rival Jair Bolsonaro. He is threatening tariffs on Indian and Chinese oil imports from Russia and using economic leverage to push BRICS countries away from their loose talk on de-dollarisation.
In the last four months, three core pillars of Trump's strategy have become visible: using tariffs to narrow trade and fiscal deficits; mobilising investment to reindustrialise the US; and compelling trade partners to buy American energy and goods.
Even countries with minimal trade ties to the US have had to offer something of interest to the White House. Pakistan's offering was its allegedly 'rich' oilfields. The EU, Japan, and South Korea have made sweeping pledges, including tariff concessions, major investments, and hefty American purchases. Whether these commitments are realised is another question. But they have delivered the optics of victory that Trump craves.
What India offered remains unclear—but evidently, it was not enough. If Delhi was unprepared for Trump's counter-revolution in trade, it now faces an even more profound challenge: coping with a broader transformation of the global financial and technological order.
Trump is targeting the foundations of the old monetary system. His administration's embrace of cryptocurrencies and stablecoins promises to reinforce the dollar's dominance over the global system and the US ability to leverage it.
At the same time, Trump is aggressively deregulating artificial intelligence. At a recent AI summit in Pittsburgh, he announced a sweeping new policy to promote American AI dominance—especially over China—and pledged to invest a significant share of the revenues secured through trade negotiations into AI-driven industrial renewal.
Trump's vision of American resurgence hinges less on outsourcing work and insourcing labour and more on technological innovation to restore US industrial might. In short, Trump is not just renegotiating trade. He is leading a radical overhaul of American capitalism by reshoring key elements of the supply chains, promoting a national industrial policy, and investing in tech-centric manufacturing in the United States.
As India resumes trade talks with the US later this month, it must recognise this historic moment in the evolution of the global economy. Any negotiating strategy premised on maintaining the status quo at home at a time of radical change abroad will leave India more vulnerable—not just to US pressure, but to the accumulating costs of missing a long-overdue internal economic transformation.
This is a moment that demands India to focus on reforming its own economy to make it globally competitive and technologically agile.
India owes this to itself – and to its future.
(C. Raja Mohan is a contributing editor on international affairs for The Indian Express)