a day ago
The 1600: What is Trump's Beef With India?
The Insider's Track
Good morning,
The irony of Trump 2.0 is, for all his bombast about America First, he may very well end up being remembered for the massive changes he is making to the global order, for better and/or worse. I'm trying to be optimistic about the endgame in Ukraine, but for all I know the deal Trump ends up making will be looked at in time as something akin to Munich in 1938, when the Europeans handed over the Sudetenland to Hitler in exchange for him promising to chill out. Remember, Neville Chamberlain arrived home to London from that summit hailed as a hero and a peacemaker. I am hopeful Trump is not walking a similar path with Putin.
Russia aside, one of the other big geopolitical shifts that's happening under our feet has to do with our relationship with India.
India is the second biggest democracy in the world. 1.4 billion people and counting. A hugely influential force in the Pacific, where, like it or not, the next Big War will probably play out. Our relationship with the Indians over the past 25 years has been one of mutual respect based on similar goals... or at least it was until recently. Trump, for reasons that remain hazy, has taken a particularly aggressive posture toward New Delhi and the Modi government, even though he and the populist Modi are both alike in many ways.
We've hit India with some of the sharpest tariffs of any of our trading partners. A week from today, the effective tariff rate on Indian goods goes from 25% to 50%. India has a reputation for being a protectionist economy, but its mean tariff rate is under 5%, falling from 56% in 1990. As developing economies develop, they tend to lower their trade barriers, which is exactly what India is doing. Why Trump believes bullying the developing world is appropriate behavior for a global hegemon remains one of the more puzzling questions of his trade agenda. He's doing it to Brazil, too, but there his interests are purely political.
For India, Trump has said the high tariff rate is punitive in nature—punishment for India continuing to buy oil from Russia and effectively helping to underwrite Moscow's war machine. I caught Scott Bessent on CNBC yesterday, where he accused the Indians of "profiteering" from the war by essentially buying Russian crude, refining it and selling it back at a higher price on the open market. I certainly get why we'd want them to stop doing this, but India is buying so much Russian oil because the oil is being sold at a steep discount. Isn't that just good business, capitalizing on the dynamics of the market? It's a bit rich for Bessent, a former hedge-fund guy, to be complaining about what he referred to as "opportunistic arbitrage," ie. the exact strategy that has made people like him unimaginable wealthy, often at the expense of American businesses and workers. I digress.
Another reason for Trump's new hardline tact on India has to do with the brief shooting war between India and Pakistan that erupted in April, after a Pakistani terror attack that killed 26 Indian tourists in Kashmir. Trump has made it a point to take credit for bringing those two nuclear powers to the table and hammering out a ceasefire. The Pakistanis rushed to thank him, and even put him up for the Nobel he covets. India, though, has not credited Trump for brokering that ceasefire and, in fact, scoffs at the notion of any external mediation in its long-running conflict with its neighbor. It seems like Trump has noted this affront to the peacemaker-in-chief persona he is trying to cultivate and is retaliating as such.
Beyond all that, there's also a deep undercurrent of anti-Indian sentiment that runs through MAGA, which Trump is probably aware of. I spend entirely too much of my precious waking hours trawling right-wing message boards and X threads to see what they're talking about (just as I do for the left, which can be equally tedious) and the racism and xenophobia toward Indians coming from the MAGA grassroots is pretty shocking... and I am not easily shocked. A lot of it has to do with this belief that Indians are scamming the H-1B visa program and taking jobs away from Americans, particularly in the high-paying tech field. But there are only like 400K H-1Bs approved every year. Foreign workers are an easy scapegoat for the broader trend of AI displacing labor, and the fact that these tech companies want to get the best labor at the cheapest cost. Again, free markets. Don't hate the player...
Meanwhile, Trump is getting cozier with the Pakistanis, inviting their army chief to the White House, despite the fact that Pak is in bed with Beijing, harbored bin Laden and helped the Taliban take back Kabul from us in 2021. Not exactly our friends. At the same time, we're taking a hostile posture toward our actual friends who operate a sprawling democracy in a very strategically important region, where we need all the help we can get to counter China's rise. All the while, China continues to get the soft touch with lower tariffs than India while also avoiding sanctions for buying its own Russian oil.
As Nikki Haley writes in a Newsweek op-ed today on this topic: "The United States should not lose sight of what matters most: our shared goals. To face China, the United States must have a friend in India."
The Rundown
Back in February, Ukrainian President Volodymyr Zelensky left the White House early after a tense meeting with Donald Trump that ended in a heated exchange. This week, he stood in the same room smiling for cameras, cracking jokes with Trump, and accepting compliments on his suit from the assembled press pool as European leaders looked on.
The shift in tone was stark. Administration officials described the atmosphere as "terrific" and "really productive," and Vice President JD Vance—who clashed with Zelensky during the previous visit—kept a low profile.
Yet for Trump's MAGA base, the change in mood did little to ease concerns over what came next. Trump's sudden openness to offering NATO-style security guarantees to Ukraine has drawn a sharp rebuke from his hardcore allies, reigniting tensions over America's role in the war. Read more.
Also happening:
Russia-Ukraine: Russian Foreign Minister Sergey Lavrov said Moscow must be involved in decisions about security guarantees for Ukraine, calling it a "road to nowhere" without Russia's participation and consent. Lavrov said Russia supports the U.K., France, and Germany developing collective security guarantees "provided they are truly reliable." Ukraine's European allies are formulating plans, with U.S. support, for how to guarantee the country's future security and deter Russian aggression. One option under discussion is a collective defense agreement, similar to NATO's Article 5. Read more.
Birthright citizenship: The Trump administration is seeking more time in federal court as it considers how to bring a challenge to birthright citizenship before the U.S. Supreme Court. In a consent motion filed on August 19 in the District of Maryland, government lawyers requested an additional 30 days to respond to an amended complaint in CASA Inc. v. Trump. Read more.
This is a preview of The 1600—Tap here to get this newsletter delivered straight to your inbox.
